Confused about EBITDA calculation

by a searcher from Full Sail University

Jan 12,2021

This is from an offering memorandum provided by the broker. It appears he's calculating EBITDA by adding interest, depreciation and amortization to the 'ordinary income' line. Am I misunderstanding something? By definition, that seems to be very much not the EBITDA.

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professional from University of Southern California - Marshall School of Business

Warren Buffett says, “People who use EBITDA are either trying to con you or they’re conning themselves.” Charlie Munger, Buffett’s right-hand man, goes even further: “I think that, every time you see the word EBITDA, you should substitute the word ‘bullshit’" Strong words from some of the most successful businessmen on the planet.

08/18/2022 | like reply | 0 likes

searcher from Stanford University - Graduate School of Business

Echoing what David and Dominik have said, because net operating income includes interest and D&A, you arrive at EBITDA reversing those charges through this calculation.

01/19/2021 | like reply | 0 likes

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