Is EV/EBIT preferred over EV/EBITDA because it takes into account depreciation and amortization? Sorry kinda a basic question I know

like
Posting as :
works at
You are currently posting as works at

who prefers ev / ebit? I rarely see that multiple

like

Old timers in capital intensive industries used to use EBIT as the preferred valuation methodology (like way way back in the day). Even though EBIT is more accurate in sectors with large annual CapEx, the banking community over the years has made EBITDA the universal valuation methodology for the reasons stated below by others…and deals off EBITDA are substantially larger than EBIT resulting in higher fees for bankers.

like

Ev/ebit is preferred in businesses where d&a are a large factor to the business, such as asset-intensive businesses. D&a are often seen as a proxy to investments in Capex and therefore you would like to factor that in when valuing companies in such industries.
Regardless, EBITDA is still widely used as a proxy to FCF for the other industries and therefore still very relevant.
Nevertheless, in a valuation book you'd normally present both of these metrics anyway to a client.

like

Thanks! This was very helpful.

Generally EBITDA is preferred by investors as it is more of a proxy for the cash generated by the business. D&A are just accounting principles so don’t actually reflect cash generation, hence investors like to exclude them.

like

Maybe if you’re looking at airlines

like

Related Posts

like

Does anyone have suggestions for criminalist entrance exam? And what is the salary range for this job?

like
like

On personal Capital, how many of you add the value of your car to your net worth

like

I just moved to another state. How can I find a recruiter? Any tip is appreciated. I have been applying but haven't heard back much.

like
like

Wondering if anyone has experience with requesting a receipt from Becker. I paid for Becker monthly prior to starting with my firm and now I can submit the costs to my firm for reimbursement. I plan to email them but just was curious if anyone did this before and had better direction.

like

I moved to Canada from India 2.5 years ago for my PG in IT BA. I have a bachelors in IT and I worked as a developer for 5 years back home. After my PG, I spent 8 months looking for a job, my current company interviewed me for Technical project manager, but they offered me the role of a PC. I accepted it without negotiating as I did not want to lose the opportunity, I am extremely underpaid and I have been doing the job of 3 people, as my company keeps firing folks. I’ve lost all my confidence.

like

Would you recommend an associate making 90k base in NYC prioritize maxing out their 401k and Roth IRA even if it means they won't save beyond that? Assume debt has been paid off and 3 month emergency fund in savings

like

Health stuff (beyond anxiety and depression) getting me down. Want to take med leave (dr has said yes), but am afraid of internal politics and YE. Need courage to go through with it

like

Hi, can you share your thoughts on what is a better option, I have following options
HSBC: X lpa (fixed)
KPMG: X+1
IBM: X+5

Work life balance and career growth are my top priority

like

Hello fishes,

I am really confused where to join. I have dubai offer for 260000 AED yearly .
I have offer from India location for 39 LPA fixed .

Which one should I join ?

like

Does ETH get to 1000 by end of year? Thoughts?

Hey folks, looking for some insight. How much should I ask my hourly wage to be for a contract job with Amazon Business that will run from mid August to end of December 2022?

I was looking for a full-time position that paid $70,000 with job security. The contract makes me a little nervous. Should I ask for more? If so, then how much more is reasonable?

Hi all,

I'm having 2.3 YOE in Java. I'm looking for a job change(Coimbatore location). Kindly let me know if there is any openings in Coimbatore location.

like

Hi there, I'm a self taught software engineer with almost 3 years of professional experience and have 3 companies (full-time) in my resume.

I'm thinking of moving forward now. So, could you please tell me what the job market would look like for me? And what things to consider while applying?

Thanks!

likehelpful

Crypto investors- if you hit 100% return, would you sell off your cost basis and leave the remainder sitting there? Or would you continue to hold? For context- I started investing in January

like

I’m a compensation analyst and i’m wondering if anyone has tips or ideas for breaking into tech! I’m planning to take my scrum certification sometime soon and i’m doing the google project management course right now and I really enjoy it so ideally I would like to be a PM of some sort. If you guys have any connections or helpful tips I would greatly appreciate!

like

How the hike cycle looks like in EY GDS and EY India? Which month we get hikes

like

Additional Posts in Finance

Anyone take adderall? Does it help u stay focused?

like

How much does an associate 1 make at a big4 in IB?

like

Best resume writing services? Or any recommendations if you’ve ever used one?

like

Besides working, how do you finance pros typically spend the weekend?

like

Uber driver awkwardly asks if he can ask me a question. I say, "Sure." He says, "What do you think is the most important thing in life?"

like

The hangover is real today.

like

Betterment vs Wealthfront, What has your experience been like?

like

I eat an Everything bagel w/butter every single morning. Am I being really unhealthy? I guess it could be worse?! What do you eat for breakfast?

like

I'm not sure if I have the willpower to become "successful" in this industry.

like

I love that my 401k gets $200 in dividends every quarter

like

What’s your day to day like in trading / portfolio management ?

like

What company would you never want to work for and why? Company need not be in finance.

like

DM me for a referral to EY or EYP if you have over 1 year of professional experience. Great pay, most positions are location-flexible, and they are hiring like crazy.

like

What is the best / funniest name you've found in your corporate directory? I'll start: at Morgan Stanley we have a young employee named Morgan A. Stanley. (Where else could he work?)

like

I think my MD got to where he is now based solely on flattery and politics.

like

Switching over to Lyft. Peace Uber.

like

Anyone here work on the sales team/relationship management at their bank?

like

I would love to work internationally, but my firm doesn't have international offices to be placed in. Advice on how to make the move without changing industries entirely?

like

At what point do you elevate your peer’s mistakes to managers? It feels like my teammates elevate each other frequently but I don’t like to get involved because it seems like tattling. Do managers value knowing who on their team is messing up in small ways?

like

Been hearing a lot about the college debt burden. Let's compare... what's the debt number you've accumulated since graduating?

like

New to Fishbowl?

Download the Fishbowl app to
unlock all discussions on Fishbowl.
That was just a preview…
Sign Up to see all discussions
  • Discover what it’s like to work at companies from real professionals
  • Get candid advice from people in your field in a safe space
  • Chat and network with other professionals in your field
Sign up in seconds to unlock all discussions on Fishbowl.

Already a user?
Login here

Share

Embed this post

Copy and paste embed code on your site

Preview

Download the
Fishbowl app

See what’s happening in your industry
from the palm of your hand.

A phone with Fishbowl app

Send download link to your phone

OR

Scan your QR code to download
Fishbowl app on your mobile

By continuing you agree to Terms of Use and Privacy Policy.

Messaging rates may apply

Download app

Sign up for free to view this conversation on Fishbowl

By continuing you agree to Terms of Use and Privacy Policy

Already have an account? Log in

Sign up for free to continue using Fishbowl

By continuing you agree to Terms of Use(New) and Privacy Policy(New)
Messaging rates may apply

Already have an account? Log in

For account settings, visit Fishbowl on Desktop Browser or

General

Legal