Can someone explain the obsession with EBITDA and not Nett P
Discussion
Much emphasis is now put on EBITDA.
I can understand that it is a way to compare businesses but in todays market with high borrowing costs and interest charges, but I still tend to see it as "not real profit"
Also can understand overlooking taxes etc
Some businesses such as car dealers have huge borrowings and interest charges to finance stock.
It is not possible to run these businesses without some level of stock and the interest costs are huge. So how is the cost of the interest not relevant. It certainly is to the Nett profit in the stat accounts at the end of the year, it's a real cost.
Powerfully Built Management Consultant Types talk about EBIITDA as real and genuine profit....
Am I missing something here?
I can understand that it is a way to compare businesses but in todays market with high borrowing costs and interest charges, but I still tend to see it as "not real profit"
Also can understand overlooking taxes etc
Some businesses such as car dealers have huge borrowings and interest charges to finance stock.
It is not possible to run these businesses without some level of stock and the interest costs are huge. So how is the cost of the interest not relevant. It certainly is to the Nett profit in the stat accounts at the end of the year, it's a real cost.
Powerfully Built Management Consultant Types talk about EBIITDA as real and genuine profit....
Am I missing something here?
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