EBITA vs EBIT and EBITDA

[@TheFinanceStoryteller]

Enjoyed this video? Then please subscribe to the channel, and watch an example of calculating EBITDA next kzbin.info/www/bejne/bZbCZ6R7pJaaqKs

[@percevalzinzin5983]

Crystal clear, exactly the content I was looking for!!!

[@TheFinanceStoryteller]

Wonderful to hear that. Please subscribe to the channel, and spread the word!

[@ezkape]

Incredible clear and undesrtandable. My company will change to EBIT rather than internal measurings, this will help me a lot to understand this.

[@TheFinanceStoryteller]

Good to hear that! Thank you for commenting. I have done quite a few videos on the topic of EBITDA, as well as Gross Margin / Operating Margin, so plenty more to watch on my channel.

[@yek4080]

Thank u so much for your help! From korea!

[@TheFinanceStoryteller]

Happy to help! Greetings back from the Netherlands.

[@simple8166]

Thank you for this video

[@TheFinanceStoryteller]

You're welcome, Badri!

[@lahboubtaaissat2108]

Thank you very clear !

[@TheFinanceStoryteller]

Glad to hear that, Lahboub! Thank you for watching and commenting.

[@zhimingmar]

Well explained. Thanks !

[@TheFinanceStoryteller]

You're welcome! I have some more examples for you: kzbin.info/www/bejne/bZbCZ6R7pJaaqKs

[@hacker010010101]

This is good quality content. Thank you!

[@TheFinanceStoryteller]

Thanks for the feedback! Very happy to hear that. :-)

[@elenanosova5957]

Thanks a lot!

[@TheFinanceStoryteller]

You're welcome, Elena! I have a few more videos (including examples) related to EBIT and EBITDA in this playlist: kzbin.info/www/bejne/bZbCZ6R7pJaaqKs

[@jmherrera23]

The Best.

[@TheFinanceStoryteller]

Agree! ;-)

[@rikliu1179]

Can you explain EBITABCDEFXDA

[@TheFinanceStoryteller]

No, I don't go beyond EBITDARM. 😉

[@SuryaBudimansyah]

EAT: Umm when is my turn? I wanna have some vs too! Comprehensive Income: Patience, kid. They don't know who they're messin' with . Can't think of better joke, greetings from newcomer on the channel :)

[@TheFinanceStoryteller]

Welcome Surya!!!

[@Overthought1]

The last section relates each accounting category to an aspect of the business, but WHY is it okay (and even useful) to exclude these things? Doesn't that give you a skewed perspective of a company? Furthermore, doesn't this kind of logic allow us to say that ANY arbitrary cost category X should be excluded from an earnings metric because "it depends on aspect Y of the business"? What makes these 4 categories (ITDA) special? Edit: I found a helpful comment on another video: "EBITDA is an operating performance metric that allows for peer-to-peer comparison of performance, regardless of geography and investment structure. I don’t believe EBITDA is a valuation metric and it shouldn’t be viewed as one." (I was thinking it was a valuation metric)

[@TheFinanceStoryteller]

You are making a very valid point: you don't want companies (or more specifically its business leaders) to arbitrarily exclude whatever cost category they don't like from their operating performance metrics. I have seen some extremely ugly examples of that happening. See my discussion of GAAP vs non-GAAP metrics kzbin.info/www/bejne/m6jdnZqkfNmZo8k However, I do believe there is some value in comparing two companies on the EBITDA level. These 4 categories (ITDA) are indeed special. They are commonly seen as the 4 "distorters" of getting a proper view of the operational performance of a company. In other words, the argument is that net income is actually given a skewed perspective, and once you exclude ITDA (for reasons given in my videos), you would have a more apples-to-apples comparison between companies that neutralizes for non-operational factors. EBITDA is used by some people as a valuation metric, as a proxy for cash flow. "My company is worth 4x to 5x EBITDA" is what I have heard a lot of business owners state. That's a very simplistic way of performing a valuation, a DCF analysis (discounted cash flow) would be preferable. A multiple of EBITDA does give a ballpark number, but should be treated with caution! Hope this helps!

[@dr.poojagulati5842]

good video

[@TheFinanceStoryteller]

Thank you, Pooja! Some more examples available in my EBIT-EBITA-EBITDA playlist, applying the concepts to calculate these metrics from annual report information: kzbin.info/www/bejne/hGe9mHyMdraYjrM

[@Bumsi4tw]

Very well done! Saves my ass

[@TheFinanceStoryteller]

Thank you, Marcel! Happy to help. :-)