EBITDA vs. Cash Flow

On Demand Course

Instructor: Dev Strischek

Duration: 1 HR

What You'll Learn

EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) 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 course will explain why EBITDA does not measure cash flow and what more accurate measures are available. The session includes several examples and a case study to illustrate why EBITDA is flawed and how to apply better cash flow tools.

Topics covered in this session

Definition of EBITDA
Origins of EBITDA—its relationship to traditional cash flow (TCF)
Problems with TCF, EBITDA, and adjusted EBITDA
SEC crackdown on EBITDA and adjusted EBITDA
Alternatives to EBITDA—Operating Cash Flow, Net Cash after Operation, Net Cash Income, Cash after Debt Amortization, and Free Cash Flow
Case Study

Who Should Attend:

Credit analysts and credit approvers
Commercial bankers and their managers
Chief credit officers
Loan review officers
Commercial underwriters

*This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

About the Author:

Dev Strischek

A frequent speaker, instructor, advisor and writer on credit risk and commercial banking topics and issues, Martin J. "Dev" Strischek is 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 the former SVP and senior credit policy officer at SunTrust Bank, Atlanta. He was responsible for developing, implementing, and administering credit policies for SunTrust’s wholesale lines of business--commercial, commercial real estate, corporate investment banking, capital markets, business banking and private wealth management. Prior to SunTrust, Mr. Strischek was chief credit officer for Barnett Bank’s Palm Beach market. Dev is also a member of the Financial Accounting Standards Board’s (FASB’s) Private Company Council (PCC).

On-Demand Course