As a Business Broker, I see the term E.B.I.T.D.A. being confused with Net Cash Flow. Earnings Before Interest, Tax, Depreciation, & Amortization only tells part of the story, as it does not consider the owner’s salary or qualifiable add-backs, such as the Mercedes Benz the owner is driving. Two (2) identical businesses can have huge variations in E.B.I.T.D.A. based on accounting practices. Instead, the financial health of a business should be based on Seller’s Discretionary Earnings, AKA Net Cash Flow, AKA Owner Benefit, which is the bottom line.