|
Article Directory
|
+ Authors
+ Articles
|
|
|
|
Business School for Non-Business Minds: What Is EBITDA?
Copyright (c) 2008-2012 Melissa Mashtonio
I was sitting in a company meeting recently and as usual the financial talk led to odd acronyms you rarely hear outside the boardroom. The one that caught my ear? EBITDA. It sounds like a word spoken by Latka on “Taxi,” doesn’t it? But what is it?
EBITDA (pronounced eee-bit-da) is an acronym for earnings before interest, taxes, depreciation and amortization.
At its most basic, EBITDA is a measure of a company’s profits. But it’s not as simple as that.
EBITDA came to prominence in the 1980s as leveraged buyout investors used it to calculate whether companies could pay back the interest and retire the debt on financed deals after a restructuring. Investors promoted EBITDA as a tool to determine whether a company could service its debt in the near term, say over a year or two.
The use of EBITDA has since spread to a wide range of businesses. Proponents say EBITDA offers a clearer reflection of operations by stripping out expenses that can obscure how a company is really performing. However, EBITDA in not a defined measure according to generally accepted accounting principles (GAAP).
In the calculation of EBITDA, interest, which is largely a function of management's choice of financing, is ignored. Taxes are left out because they can vary widely depending on acquisitions and losses in prior years; this variation can distort net income. Finally, EBITDA removes the arbitrary and subjective judgments that can go into calculating depreciation and amortization.
By eliminating these items, EBITDA makes it easier to evaluate the financial health of various companies and to compare against industry averages. It also is useful for evaluating firms with different capital structures, tax rates and depreciation policies. EBITDA is a good measure of the fundamental earning power of a company’s operations because it eliminates some of the extraneous factors and allows for a more “apples-to-apples” comparison with its peers. At the same time, EBITDA gives investors a sense of how much money a young or restructured company might generate before it has to hand over payments to creditors and Uncle Sam.
But there are some problems with measuring a company by EBITDA. It leaves out the cash required to fund working capital and the replacement of old equipment, which can be significant. ETBITDA should not be used to determine a company’s cash flows; one should continue to use the statement of cash flows.
Like any other financial metric, EBITDA is only a single indicator and should be used with a variety of others measures to determine the full health of any company.
|
Melissa Mashtonio writes for Manta.com, the authority for finding 45 million free company profiles covering large to small firms worldwide--and their related industries and products. Empowered with CRM tools, users compete smarter, accelerate sales prospecting and partnering, and identify revenue opportunities faster. Use Manta.com to evaluate the financial health of potential partners and competitors.
|
Follow "The Phantom Writers" on Twitter
(@phantomwriters)
to be notified when new articles are made available.
VOTE ON THIS ARTICLE
Needs Work >>
0 -
1 -
2 -
3 -
4 -
5
<< Excellent Article
Tell our authors what you think about their article.
|
Top-Level Category: Business Offline Articles || Related Categories: Business Online Articles
10 Most Recent Articles Written by Melissa Mashtonio
Going Global: Is It Right for Your Small Business?
Written by: Melissa Mashtonio |
Distributed: 2008-07-24 |
Word Count: 661 |
Page Views: 982
| Votes: 6 |
Rating: 3.00
Have you been feeling the itch to send your small business
global? Many are in your shoes--seeing the benefits of business
expansion but also fearing the risk of taking products abroad.
Although exporting your products may expand your business and
bring higher sales, the task may seem daunting to a small
business with fewer resources than a large company. But if you
take your time and research the process, going global with your
company may garner more rewards than costs.
Women Owning the Workplace: Tips to Guide Female Entrepreneurs
Written by: Melissa Mashtonio |
Distributed: 2008-07-22 |
Word Count: 669 |
Page Views: 1315
| Votes: 2 |
Rating: 2.00
Women are taking the business world by storm, and it doesn't
look like they're backing down. According the
Womenentrepreneur.com, women-owned firms are the fastest growing
in the country. Women are looking beyond the traditional roles
and moving ahead to a new role: entrepreneur. This does not
necessarily mean women are swapping roles with their spouses
(although some are), but they simply may be adding owning a
business to their list of daily duties.
Small Business Health Insurance: Escaping the Catch-22
Written by: Melissa Mashtonio |
Distributed: 2008-05-29 |
Word Count: 780 |
Page Views: 1047
| Votes: 6 |
Rating: 3.33
As the economy continues to tank so do the number of Americans
without health insurance—and the number small business owners who
can afford to insure their employees.
Business School for Non-Business Minds: Inc or LLC?
Written by: Melissa Mashtonio |
Distributed: 2008-04-23 |
Word Count: 594 |
Page Views: 795
| Votes: 4 |
Rating: 2.50
Owning a business can be complicated enough without having to
deal with all the confusing acronyms and abbreviations that
assault you at every turn. Take these two: Inc. and LLC. What do
they mean to you and your business?
Business School for Non-Business Minds: Got a NAICS Number?
Written by: Melissa Mashtonio |
Distributed: 2008-04-15 |
Word Count: 423 |
Page Views: 1637
| Votes: 5 |
Rating: 4.40
I’m a journalist. I spent a lot of my career in the news
business. As my career has progressed, I’ve spent time at small
and large companies, and I have sat through dozens of business
meetings wondering what the heck the “money” people are talking
about. They used acronyms as if they were a foreign language.
Small Business: Don't Be a Dunce, Get a D-U-N-S
Written by: Melissa Mashtonio |
Distributed: 2008-04-01 |
Word Count: 527 |
Page Views: 713
| Votes: 12 |
Rating: 2.08
Your idea is great. You’ve got a great product,but are you really
ready to start doing business? This is the 21st century and
“charge it” is the mantra of the day. And credit is just as
important to a business owner as it is to a consumer. That’s why
every new business needs to establish a credit file. That’s where
a D-U-N-S number comes in.
Top 10 US Cities and Their Biggest Companies
Written by: Melissa Mashtonio |
Distributed: 2008-03-25 |
Word Count: 665 |
Page Views: 2605
| Votes: 9 |
Rating: 1.33
Have you ever wondered what the largest company is in your city?
I did. I'm in Columbus, Ohio, and I was sure that Nationwide
Insurance was the largest company (by revenue) here. I was wrong.
It turns out there's an entire JP Morgan Chase entity based
right here in my hometown. So that got me wondering about other
big cities. And an easy search shows that the largest cities in
the world rarely are home to the largest companies.
All of Author's Articles on this site: Melissa Mashtonio Articles
Most Recent "Business Offline" Articles
How To Build a Strong and Powerful Business During a Recession
Written by: Trey McMartin |
Distributed: 2011-11-10 |
Word Count: 987 |
Page Views: 465
During a recession, most business owners pull the reins on
advertising budgets, fearful of what tomorrow might bring...
Those who remain fearful have forgotten what made them the
success they are today... They have forgotten that they have
a God-given talent to overcome the incredible obstacles in
their paths.
SEO Lessons from Local Businesses
Written by: Trey McMartin |
Distributed: 2011-11-09 |
Word Count: 945 |
Page Views: 870
More than once in the six years that I have been providing
SEO services for websites, I have had the opportunity to
discuss with individual business owners their search engine
optimization needs. Now and again, I run across an
individual business owner who is quick to say that SEO is
absolutely worthless. When confronted with such an absolute
statement, I like to press for details. It has been my
experience that people who speak in negative absolutes will
have a horror story to share.
Where Will FDA Target Next? What IVD Manufacturers Should Know Before Their Next FDA Audit
Written by: Norm Howe |
Distributed: 2011-09-12 |
Word Count: 706 |
Page Views: 353
Medical device manufacturers are always interested in knowing
what FDA's next area of focus will be. Well, if you're an In
Vitro Diagnostic manufacturer you might review your measurement
systems.
Online Fax - 10 Reasons To Get An Online Fax Service
Written by: Titus Hoskins |
Distributed: 2011-09-12 |
Word Count: 560 |
Page Views: 366
Online faxing is the new more modern way to fax. If you or your
company is not using an online fax service, here are 10 good
reasons why you should get it.
Best Effort Essential for the Job Interview
Written by: Barbara Wulf MS, ACC, CPCC |
Distributed: 2011-07-30 |
Word Count: 676 |
Page Views: 445
Interviewing will determine if you are the right person for the
job. These tips will help you make the job interview a success.
Go Green With Your Career Search
Written by: Barbara Wulf MS, ACC, CPCC |
Distributed: 2011-07-28 |
Word Count: 636 |
Page Views: 361
Many of the qualities of green living, like recycling and
sustainability, can apply to a career search, even if the
career is not directly associated with green industries.
ReCareer in the Second-half of Life
Written by: Barbara Wulf MS, ACC, CPCC |
Distributed: 2011-07-26 |
Word Count: 525 |
Page Views: 423
| Votes: 1 |
Rating: 3.00
Many of us worked the first half of our life to "fit" the
job description. ReCareering is about finding the right fit,
being selective, being creative, being fulfilled and being
intentional about how you spend your time.
Up in the Air
Written by: Barbara Wulf MS, ACC, CPCC |
Distributed: 2011-07-24 |
Word Count: 678 |
Page Views: 426
When looking for work or changing careers, go beyond researching
on the internet and reading articles. Find out how you can learn
from the art of listening and having a conversation.
Salon and Spa Owners: Which Monk Are You?
Written by: Dan Lok |
Distributed: 2011-07-05 |
Word Count: 477 |
Page Views: 463
Too many salon and spa owners are carrying around a lot
hurts, regrets, guilt, past failures and fears about the
future. But no one is forcing you to carry these emotional
rocks, so put that sack down!
The Single Most Profitable Day You Spend on Your Spa or Salon!
Written by: Dan Lok |
Distributed: 2011-06-30 |
Word Count: 470 |
Page Views: 569
Salon and spa owners need to combine their marketing plan
with marketing systems. A marketing calendar plans out
strategies for a year, and is instrumental to the success of
your spa or salon.
Most Viewed "Business Offline" Articles
How To Write A 300 Page Book In Four Months
Written by: Mark Silver |
Distributed: 2008-07-15 |
Word Count: 821 |
Page Views: 36741
| Votes: 6 |
Rating: 1.83
There's a lot of hoopla about becoming an author of your very
own business book. The promise of fame and fortune is very
alluring. Yet your book remains perpetually 'about to be'
written. Meanwhile your business has ground to a halt. Hmmm...
might there be a better way to get a book written?
The Best Marketing Book I've Ever Read (You'll Be Surprised)
Written by: Judy Murdoch |
Distributed: 2007-05-09 |
Word Count: 1522 |
Page Views: 33878
| Votes: 15 |
Rating: 3.60
From time to time someone asks me to recommend marketing books.
Here's one of my favorite marketing books that always surprises
people. Curious? Read on.
The Bizarre History Of The HOLLYWOOD Sign
Written by: Morris Timlen |
Distributed: 2008-11-05 |
Word Count: 1211 |
Page Views: 28586
| Votes: 22 |
Rating: 3.32
The most famous sign in the history of mankind is the one that
graces the side of the hill above Hollywood, California. As
famous a landmark as the Christ the Redeemer statue in Rio De
Janeiro, the Eiffel Tower in Paris France, the Great Pyramid of
Giza in Egypt, The Church of the Savior on Blood in Saint
Petersburg Russia, and the Statue Of Liberty in New York City,
the Hollywood sign is known around the world as the symbol of the
American movie industry.
What Does It Take To Be A Successful Salesman?
Written by: Casey Moher |
Distributed: 2008-08-05 |
Word Count: 930 |
Page Views: 16090
| Votes: 68 |
Rating: 3.16
In the course of my average workweek, I meet people who tell me
that they have no sales experience, and very literally, many
will tell me that they could not sell if their lives depended on
it. Do you fit into this mold? Do you seriously believe that you
can sell me on the idea that you cannot sell things?
Selecting Between a 401(k) And 403(b) For a Nonprofit
Written by: Daniel Lamaute |
Distributed: 2007-10-11 |
Word Count: 333 |
Page Views: 6840
| Votes: 17 |
Rating: 2.65
Newly released IRS regulations impose several new requirements
and fiduciary responsibilities on employers with 403(b) plans.
While the regulations generally don't take effect until January
1, 2009, there are some provisions that apply sooner.
Pitch A No-Hitter With Baseball-Themed Flower Gifts
Written by: Wesley Berry, AAF |
Distributed: 2007-12-25 |
Word Count: 413 |
Page Views: 6112
| Votes: 16 |
Rating: 1.94
Want to send a gift to the baseball fan in your life that's sure
to knock one out of the park? Send flowers with a baseball
theme! Everyone loves flowers and when you personalize them to
include the recipient's favorite hobbies, like baseball,
they're sure to make an even greater impression.
Never Write A 'Thank You' Letter Again
Written by: Perry Maisin |
Distributed: 2008-08-12 |
Word Count: 971 |
Page Views: 5867
| Votes: 17 |
Rating: 2.29
When I was in graduate school, I had a friend who interviewed at
fortune 500 companies and succeeded at landing a great job. One
day, I saw him sitting in the student union with a stack of
cards. The cards said 'thank you'. He opened each card and
signed his name. The inside of the card was blank. I asked him
what he was doing and he told me that it was important to send a
'thank you' to every person you interviewed with. He believed
that that was the difference between getting the job and being
passed over.
Conducting Effective Career Aspiration Discussions with Employees
Written by: Andria L. Corso |
Distributed: 2010-03-10 |
Word Count: 690 |
Page Views: 5332
| Votes: 8 |
Rating: 1.88
Enhance your talent management and development programs
through conducting career aspiration discussions with your
employees. Find out where they want to grow their career to
determine if it matches your business needs. This will
enable you to differentiate your employee development to
grow the future leaders of your company.
The Pros And Cons Of Postcard Marketing-direct marketing offline
Written by: Cheryl Miller |
Distributed: 2006-11-29 |
Word Count: 675 |
Page Views: 3999
| Votes: 5 |
Rating: 2.60
Postcard marketing is one of the oldest methods of marketing. Its
concept is simple but can be quite effective. It is just sending
out your message to your mailing list on a postcard. Postcard
marketing is a powerful and cost effective way to advertise and
will keep building in momentum when done correctly.
The Tea Room Business Plan – First Steps And Start Up Basics
Written by: Marcus Stout |
Distributed: 2007-03-22 |
Word Count: 1218 |
Page Views: 3703
| Votes: 19 |
Rating: 2.63
Every venture starts with the first steps and a business plan for
a quality tea room is no exception. Well thought out first steps,
properly implemented, will pay dividends in the business
operations of the tea room in later years.
Highest Ranked "Business Offline" Articles
Why Businesses Need Receivable Factoring In Cash Flow Management
Written by: Toby Seibert |
Distributed: 2007-08-08 |
Word Count: 866 |
Page Views: 1887
| Votes: 5 |
Rating: 4.60
In today's business environment, many businesses need to
fine-tune the process of getting paid on invoices, in order to
improve their cash on hand. Improving cash flow can be an ongoing
challenge for businesses of all sizes, and it is an issue that
must be addressed to ensure the long-term viability of the
business.
Whose Restaurant Can You Find Online?
Written by: Rudy Vener |
Distributed: 2007-07-09 |
Word Count: 640 |
Page Views: 1550
| Votes: 5 |
Rating: 4.40
What is so significant about Pizza Hut's latest TV commercial?
Business School for Non-Business Minds: Got a NAICS Number?
Written by: Melissa Mashtonio |
Distributed: 2008-04-15 |
Word Count: 423 |
Page Views: 1637
| Votes: 5 |
Rating: 4.40
I’m a journalist. I spent a lot of my career in the news
business. As my career has progressed, I’ve spent time at small
and large companies, and I have sat through dozens of business
meetings wondering what the heck the “money” people are talking
about. They used acronyms as if they were a foreign language.
The Problem With Swiping Sales Copy
Written by: Scott Bywater |
Distributed: 2009-12-03 |
Word Count: 480 |
Page Views: 1062
| Votes: 5 |
Rating: 4.40
This is what people miss when they try to simply "swipe"
sales copy from another advertisement.
Equal Opportunity Pizza Ordering
Written by: Rudy Vener |
Distributed: 2007-10-19 |
Word Count: 629 |
Page Views: 1546
| Votes: 8 |
Rating: 4.38
With online ordering, your menu and restaurant suddenly become
accessible to both the deaf and blind customers in your
community.
The Secret To Making Successful Business Connections
Written by: Kate Smalley |
Distributed: 2006-10-11 |
Word Count: 672 |
Page Views: 1660
| Votes: 6 |
Rating: 4.00
If you have a hard time making successful business connections,
don't despair. Anyone can be good at meeting people-if they use
the right technique. The whole secret to making a positive
connection is knowing how to attract people and inspire them to
want to give you a chance.
How to Build a Really Great Business? (Super Success Secrets from a Legendary Business Master)
Written by: Chet Holmes |
Distributed: 2007-01-15 |
Word Count: 1523 |
Page Views: 1647
| Votes: 7 |
Rating: 4.00
Times are tough. The economy is in a constant state of upheaval.
Is your company doing better than most? Are you placing greater
emphasis on pure performance?
Get the Balance Right
Written by: Rich Thawley |
Distributed: 2009-01-28 |
Word Count: 638 |
Page Views: 1499
| Votes: 11 |
Rating: 3.91
Do you build your business around your family or your family
around your business? The choice is yours.
Online Copywriting Makes Content as the King
Written by: Steven Gerber |
Distributed: 2006-12-11 |
Word Count: 560 |
Page Views: 1671
| Votes: 7 |
Rating: 3.86
The inverted pyramid is basically the placing of 4 W's in the
primary sentences of the articles, supported by the other W and H
on the following discussions. Four W's consist of what, when,
where, and who. The other W which stands for why on the other
hand, follows on the succeeding paragraphs, including the
elaboration for the H which also stands for how, if necessary.
Interview Coaching: A Home-Based Business on the Cutting Edge
Written by: Carole Martin |
Distributed: 2007-08-24 |
Word Count: 1400 |
Page Views: 1412
| Votes: 7 |
Rating: 3.86
You name it - Blackberry, Skype Connection, Cell Phone, iPhone -
these are the tools of this trade. Who would believe that someone
with a home-based business could reach out to someone in a far
away country and work with a client via a Blackberry and a cell
phone?
|
|
|
Article Reprint Rights
|

This work is licensed under a
Creative Commons License
You are not required to show the creative commons license notice when you reprint this work.
|
|
Article Statistics
|
Word Count: 426
Total Views: 1027
Views This Month: 23
Views Last Month: 24
Article Rating: 3.00 of 5
Votes Cast: 3
Author Overall Stats:
Times Viewed Overall: 10115
Author Rating: 2.55 of 5
Votes Cast Overall: 47
More Articles By Author:
Articles On This Website
Article Title Search:
Widow Search
Right Blinker
Google
Yahoo!
Zuula
Bing
Cuil
Last Distribution Date:
2008-04-24 11:24:00
|
|
|