In true eli5 way, please can someone explain the difference between Revenu and EBITDA, and, when you would want to use/assess one rather than the other.
In: 107
Earnings Before (you subtract) Interest, Taxes, and Amortized depreciation/expenses.
It is supposed to show you the baseline health of the business. If you have a solid EBITDA, and a lot of debt, for example, then you can usually safely assume that the business will be okay if you can shed the debt.
It’s kind of a core business measure. All of the things that are excluded are situational, and can be planned for/around. If EBITDA is good, but the business is not profitable, then fixing it is usually a matter of financial discipline and planning, rather than a flaw in the model itself.
Latest Answers