EBITDA is a popular measure of cash flow, but it is not accurate, and bankers and investors who rely on it as a reliable indicator of repayment ability will be deeply disappointed. This session will explain why EBITDA does not measure cash flow and what more accurate measures are available. The session also includes several examples and a case study to illustrate why EBITDA is flawed and how to apply better cash flow tools.
Reliance on EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) as a measure of cash flow is misplaced because it presumes that borrowers will pay lenders before paying their taxes, expanding their working capital assets, and fixed assets to support sales growth, among other things. Bankers and investors who rely on it as a reliable indicator of repayment ability will overestimate available cash flow and underestimate the risk of default.
This session will explain why EBITDA does not measure cash flow and what more accurate measures are available.
Reliance on EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) as a measure of cash flow is misplaced because it presumes that borrowers will pay lenders before paying their taxes, expanding their working capital assets, and fixed assets to support sales growth, among other things. Bankers and investors who rely on it as a reliable indicator of repayment ability will overestimate available cash flow and underestimate the risk of default.
This session will explain why EBITDA does not measure cash flow and what more accurate measures are available.
Dev Strischek
A frequent speaker, instructor, advisor and writer on credit risk and commercial banking topics and issues, Martin J. "Dev" Strischek principal of Devon Risk Advisory Group based near Atlanta, Georgia. Dev advises, trains, and develops for financial organizations risk management solutions and recommendations on a range of issues and topics, e.g., credit risk management, credit culture, credit policy, credit and lending training, etc. Dev is also a member of the Financial Accounting Standards Board’s (FASB’s) Private Company Council (PCC). PCC’s purpose is to evaluate and recommend to FASB revisions to current and proposed generally accepted accounting principles (GAAP) that are …
Employee Handbooks: 2025 Critical Issues
Power BI - Getting Started Building Reports and Dashboards
Leverage AI & ChatGPT for Talent Acquisition: Best Practice…
Gossip-Free: Leadership Techniques to Quell Office Chatter
Female to Female Hostility @Workplace: All you Need to Know
Harassment, Bullying, Gossip, Confrontational and Disruptiv…
Leadership: Strategic Planning and Decision Making
4-Hour Virtual Seminar on Transformational Leadership - The…
Workplace Investigations 101: How to Conduct your Investiga…
Managing Complex Projects - Project Management
2-Hour Virtual Seminar on the 6 Most Common Problems in FDA…
Managing Toxic Employees: Strategies For Leaders To Effecti…
Negotiating Skills For Professional Results - Winning Strat…
Copilot and HR: An Introduction for HR Professionals
Excel Power Skills: Master Functions, Formulas, and Macros …
Ultimate Persuasion Strategies! - Secret Influence Tools & …
Using High-Performance Coaching for Managers to Address Per…
Utilizing HR Metrics to Illustrate & Improve Human Resource…
Excel - Pivot Tables - The Key To Modern Data Analysis and …
2-Hour Virtual Seminar on How to Conduct an Internal Harass…
Do's and Don'ts of Giving Effective Feedback for Performanc…
Understanding Artificial Intelligence (AI) & using Chat GPT
Do's and Don'ts of Documenting Employee Behaviour, Performa…