EBITDA is widely treated as a measure of cash flow, but it is not an accurate one. Bankers and investors who rely on it to judge repayment ability can overstate the cash a borrower really has.
This 90-minute webinar on EBITDA vs cash flow explains where EBITDA came from, how it relates to traditional cash flow, and why it falls short. You'll then look at better alternatives, operating cash flow and free cash flow, and learn how to convert EBITDA into free cash flow for measuring debt repayment capacity.
Examples and a case study show the differences between EBITDA and free cash flow in practice.
EBITDA assumes a borrower will pay lenders before paying taxes and before funding the working capital and fixed assets needed to grow sales. As a result, lenders who lean on it tend to overstate the cash a borrower has and understate the chance of default.
This session suits credit analysts and managers, loan review and work-out officers, commercial and senior lenders, credit risk managers, chief credit officers, bank directors and executives.
EBITDA assumes a borrower will pay lenders before paying taxes and before funding the working capital and fixed assets needed to grow sales. As a result, lenders who lean on it tend to overstate the cash a borrower has and understate the chance of default.
This session suits credit analysts and managers, loan review and work-out officers, commercial and senior lenders, credit risk managers, chief credit officers, bank directors and executives.
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 …
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