Knowledge@wharton

Is It Time to Get Rid of EBITDA?

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Synopsis

EBITDA or Earnings Before Interest Taxes Depreciation and Amortization has been used by analysts and investors to measure the fiscal health of the many high-tech media and other asset-heavy firms that do not generate earnings but instead incur plenty of depreciation amortization and other charges. Recently however EBITDA has come under fire for contributing to accounting irregularities at such companies as WorldCom and AOL Time Warner. See acast.com/privacy for privacy and opt-out information.