Modified on 2011/07/08 09:57 by swathen — Categorized as:
Uncategorized Discounted Cash Flow Analysis Cost of Capital
Funding Capital Asset Pricing Model Discount Rates NPV What is
EBITDA? defined is earnings before interest, taxes,
depreciation, and amortization. It measures a company’s
financial performance by computing earnings from core business
operations, without including the effects of capital structure,
tax rates and depreciation policies. It is used as a proxy for a
company’s operating cash flow and is not defined under GAAP.
EBITDA is often used to value a company, with the enterprise
value of a company calculated as a multiple of its EBITDA.
EBITDA is usually expressed in industry on an annual basis,
though just like any other earnings or cash flow measure it is
also expressed on a quarterly or monthly basis. While last
year’s EBITDA may be useful in assessing the performance of a
company close to the start of the following year, it will lose
its timeliness later on during that following year. To