What, Why and How's of EBITDA
Middle market businesses are typically priced on how much the company makes - it's earnings. The exact metric for earnings is EBITDA. Earnings Before Interest, Taxes, Depreciation and Amortization.
This module will cover:
- Why use EBITDA and not actual cash flow - which would theoretically be better?
- Why exclude all those items from EBITDA?
- Where the rule-of-thumb multiples-of-EBITDA come from for valuing businesses
- Adjusting EBITDA for management / owner wages and benefits
- Adjusting EBITDA for occupancy costs
- Which time periods are used to measure EBITDA?
- Compilation, Reviews and Audits
The first few modules are designed to prepare you to assist in a valuation of your business. This module covers the basics of EBITDA and why we even use EBITDA.