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
Revenue is the money customers give you in exchange for the things you give them.
EBITDA is the amount of customer money left over after you pay for the stuff you gave your customers and the cost of being a business (except for money you have to people who loan you money, the government or spent on things that you’ll use for more than a year)
The best measure of how good a business is is taking how much money that you get from customers less the cost of everything including buying stuff to sell later less the amount of money that needs to be spent on things you’ll use over many years to keep the current activities going.
The best businesses have the ability to take some of the money left over and to buy ads or machines or set up new shops that mean more money will be left over in the future. They also are able to keep generating left over money from their existing business without other people taking their customers or forcing them to take less of their customers money for giving them the same stuff.
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