Often managers are asked to have an NPV (or DCF) calculation done on projects they are proposing. This NPV calculation will typically be performed by the Finance team. But what are they actually doing? If I asked you to give me £100 now and I told you that I would give you back £100 in… Read more »
Posts Categorized: Finance for Non Finance Managers
The EBITDA multiple & Business Valuations
Many organisations promote EBITDA as a key way of valuing a business. The idea is that EBITDA (that’s Earnings Before Interest, Tax, Depreciation & Amortisation) measures the amount of cash that a business has generated during the year. While this is not quite accurate, it is a rough guide to the level of cash generated… Read more »
EBITDA
A widely used and often misunderstood way of tracking a business’ performance is to look at its EBITDA. What is this? The acronym stands for Earnings Before Depreciation, Interest, Tax & Amortisation. But what is it actually telling us? Earnings is another word for ‘Profit’. So EBITDA is basically your profit for the period before… Read more »