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Why Not EBITDA : The True Measure of Business Health?

Delve into the world of business metrics with a focus on EBITDA, a term that has sparked endless debates among professionals. With over two decades of experience in the business acquisition sphere, our expert demystifies EBITDA, addressing the burning question: Why not EBITDA? Is it really the golden standard for assessing a business’s financial health, or is it, as some claim, the laziest metric used in the industry?

Decoding EBITDA: More Than Meets the Eye?

EBITDA stands as the most controversial and widely discussed metric in the business world. But why not EBITDA? This video explores its prevalence and the reasons behind its widespread use. Is EBITDA celebrated for its precision and depth in providing insights into a business’s financial well-being, or is its popularity merely due to the ease of calculation, allowing even novices to appear informed?

The Reality Behind the Metric

Our seasoned expert questions the efficacy of EBITDA as a standalone measure. Despite its utility in generating a snapshot of earning potential and facilitating year-on-year comparisons, relying solely on EBITDA is akin to diagnosing health based on blood pressure alone. It’s a starting point, but why not EBITDA when evaluating a business’s overall health? This analogy underscores the necessity of a broader metric suite for a comprehensive health check.

A Balanced Perspective

Concluding that EBITDA is neither inherently good nor bad, the video posits that it serves as a crucial yet partial insight into a company’s earnings generation capability. This raises the crucial consideration: why not EBITDA as the sole metric? The discussion highlights the importance of integrating EBITDA with other financial indicators to paint a full picture of a business’s health.

Join the Conversation

As we peel back the layers on EBITDA, we invite you to contribute your thoughts. Why not EBITDA? Is it a metric of convenience or a valuable tool in the arsenal of business assessment techniques? Your insights and experiences are invaluable as we navigate the complexities of business metrics together.



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