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Why EBITDA Doesn’t Spell Cash Flow

5177
Duration : 60 Minutes

Dev Strischek,

A frequent speaker, instructor, advisor and writer on credit risk and commercial banking topics and issues, Dev is principal of Devon Risk Advisory Group and engages in consulting, speaking and training on a wide range of risk, credit, and lending topics. As former SVP and senior credit policy off Read more


EBITDA is a popular measure of cash flow, but it is not accurate, and bankers and investors who rely on it as a reliable indicator of repayment ability will be deeply disappointed.  This session will explain why EBITDA does not measure cash flow and what more accurate measures are available.  The session also includes several examples and a case study to illustrate why EBITDA is flawed and how to apply better cash flow tools.

Course Objectives:

• Define and explain why EBITDA is used and why it is so popular

• Explain EBITDA’s shortcomings as a accurate, reliable measure of cash flow 

• Offer more accurate debt repayment measures of cash flow, including how to convert EBITDA into free cash flow for measuring debt repayment ability

• Demonstrate differences between EBITDA and free cash flow in case studies

Why Should You Attend:

Reliance on EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) as a measure of cash flow is misplaced because it presumes that borrowers will pay lenders before paying their taxes, expanding their working capital assets and fixed assets to support sales growth, among other things.  Bankers and investors who rely on it as a reliable indicator of repayment ability will overestimate available cash flow and underestimate the risk of default.

This session will explain why EBITDA does not measure cash flow and what more accurate measures are available.

Course Outline:

• Definition of EBITDA

• Origins of EBITDA—its relationship to traditional cash flow (TCF)

• Problems with EBITDA

• Alternatives to EBITDA—Operating Cash Flow and Free Cash Flow

What You Get:

• Training Materials

• Live Q&A Session with our Expert

• Participation Certificate

• Access to Signup Community (Optional)

• Reward Points

Who Will Benefit:

•  CEO, COO, Company Owners 

•  Small Business Owners 

•  Entrepreneurs, Sole Proprietors, Self-Employed Professionals 

•  Non-Profit Organizations 

•  Grant Managers and Fund Directors 

•  Business Management Professionals 

•  Vice Presidents, Directors, and Senior Officers 

•  Managers/Supervisors 

•  Board Directors/Members 

•  Business Brokers 

•  Investors or other Business Buyers

• Credit Analysts

• Credit Managers

• Loan review officers

• Work-out officers

• Commercial lenders

• Credit Risk Managers

• Chief Credit Officers

• Senior Lenders

• Senior Lending Officer

• Bank Director

• President

• Board Chairman

Please reach us at 1-888-844-8963 for any further assistance or if you wish to register

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Subject : Why EBITDA Doesn’t Spell Cash Flow


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