EBITDA is widely treated as a measure of cash flow, but it is not an accurate one. Bankers and investors who rely on it to judge repayment ability can overstate the cash a borrower really has.
This 90-minute webinar on EBITDA vs cash flow explains where EBITDA came from, how it relates to traditional cash flow, and why it falls short. You'll then look at better alternatives, operating cash flow and free cash flow, and learn how to convert EBITDA into free cash flow for measuring debt repayment capacity.
Examples and a case study show the differences between EBITDA and free cash flow in practice.
WHY SHOULD YOU ATTEND?
EBITDA assumes a borrower will pay lenders before paying taxes and before funding the working capital and fixed assets needed to grow sales. As a result, lenders who lean on it tend to overstate the cash a borrower has and understate the chance of default.
This session suits credit analysts and managers, loan review and work-out officers, commercial and senior lenders, credit risk managers, chief credit officers, bank directors and executives.
AREA COVERED
- Definition of EBITDA
- Origins of EBITDA and its relationship to traditional cash flow (TCF)
- Problems with EBITDA
- Alternatives to EBITDA: operating cash flow and free cash flow
- Examples and a case study
LEARNING OBJECTIVES
- Define EBITDA and explain why it is so widely used
- Explain EBITDA's shortcomings as a measure of cash flow
- Use more accurate cash flow measures of debt repayment ability
- Convert EBITDA into free cash flow
- Compare EBITDA and free cash flow using case studies
WHO WILL BENEFIT?
- 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
- Chief Executive Officer
- President
- Board Chairman
EBITDA assumes a borrower will pay lenders before paying taxes and before funding the working capital and fixed assets needed to grow sales. As a result, lenders who lean on it tend to overstate the cash a borrower has and understate the chance of default.
This session suits credit analysts and managers, loan review and work-out officers, commercial and senior lenders, credit risk managers, chief credit officers, bank directors and executives.
- Definition of EBITDA
- Origins of EBITDA and its relationship to traditional cash flow (TCF)
- Problems with EBITDA
- Alternatives to EBITDA: operating cash flow and free cash flow
- Examples and a case study
- Define EBITDA and explain why it is so widely used
- Explain EBITDA's shortcomings as a measure of cash flow
- Use more accurate cash flow measures of debt repayment ability
- Convert EBITDA into free cash flow
- Compare EBITDA and free cash flow using case studies
- 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
- Chief Executive Officer
- President
- Board Chairman
