Munger on EBITDA

munger 150x150 Munger on EBITDAThis article originally appeared on The DIV-Net May 9 2009.

Charlie Munger though a pioneer in value investing and the four filters is a fairly raw character and has a way of getting to the point in a sometimes abrupt manner. Charlie did just this when he referred to EBITDA as “bullsh*t earnings” at the Berkshire Hathaway meetings in 2003.

EBITDA = Earnings before interest taxes depreciation, and amortisation.

What is the Problem with EBITDA?

Well let me give an example:
bullet Munger on EBITDA Read More...

  • Company A earns $1M and pays $.75M in interest, taxes, & depreciation.

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