E.B.I.T.D.A. is Oftentimes Misunderstood

Understanding E.B.I.T.D.A.

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…

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