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.
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.
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.
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 …
Aligning Your HR Strategy with Your Business Strategy: A Ro…
HIPAA 2025 – Major Changes, Latest Rulings & Guidance
Understanding Accounting for non - Accounting professionals
Dealing With Difficult People: At Work & In Life
2026 Employment Law Guide - Essential Updates Every Employe…
Project Management for Non-Project Managers - Scheduling yo…
2-Hour Virtual Seminar on How to Conduct an Internal Harass…
Language is Code - Intro to AI - Generative AI - ChatGPT an…
ChatGPT and Project Management: Leveraging AI for Project M…
Managing Toxic Employees: Strategies For Leaders To Effecti…
Advanced Commercial Loan Underwriting Certification
Excel + AI: The Smart User's Guide to Faster, Easier Work w…
Harassment, Bullying, Gossip, Confrontational and Disruptiv…
Copilot and HR: An Introduction for HR Professionals
Excel Power Skills: Master Functions, Formulas, and Macros …
Identifying, Managing, and Retaining High-Potential Employe…
Eliminate Harmful And Unproductive Drama In The Workplace
How to Write Effective Audit Observations: The Principles f…
Project Management for administrative professionals
FFIEC BSA/AML Examination Manual: What Compliance Officers …
Mastering DAX Patterns in the Era of AI & Copilot
Building GMP Excellence: A Guide to Implementing Compliant …
Clinical Trial Systems: The Trial Master File (TMF) and Ele…
Excel Spreadsheets; Develop and Validate for 21 CFR Part 11…
Thriving in a Hybrid Workplace: Keys to Leadership and Team…
The Language of Leadership: Is Your Communication Style As …