On Sat, 18 May 2002, Mike Leber wrote:
press releases regarding their other choices, or perhaps considering whether the companies they consider alternatives are EBITDA postive (making a profit, or in otherwords will exist in 12 months) today (not in an imaginary planned future) or for the few that are EBITDA positive, whether they actually seem to want your business.
"EBITDA positive" does not mean profitable, or even necessarily financially stable. EBITDA is earnings before interest, taxes, depreciation, and amoritization -- all things that tend to have an impact on your finances. If you were using EBITDA as the measure of your personal financial situation, you could spend far more than your after tax income, but less than your before tax income, and declare yourself to have come out ahead. Your bank, however, probably wouldn't see it that way. The same goes for corporate finance, except that the corporations that were announcing their EBITDA numbers as the important financial data often had enough in the bank, and enough market cap, that it didn't become a critical problem for a few years. My understanding is that EBITDA does have legitimate accounting uses, but I'm not clear on what they are. I'm tempted to label this message as off-topic nitpicking, but given that the biggest problem with Internet stability at the moment seems to be financial, I'm not sure it is. -Steve -------------------------------------------------------------------------------- Steve Gibbard scg@gibbard.org