Quotes About EBITDA

EBITDA, as we noted earlier, is no longer Wall Street's favorite measure to watch. Now the hot metric is free cash flow. Some companies have looked at free cash flow for years. Warren Buffett's Berkshire Hathaway is the bestknown example, though Buffett calls it owner earnings. As Buffett's term suggests, it's an important metric for entrepreneurial companies.

References to EBITDA make us shudder — does management think the tooth fairy pays for capital expenditures?

Furthermore, we do not think so-called EBITDA (earnings before interest, taxes, depreciation and amortization) is a meaningful measure of performance. Managements that dismiss the importance of depreciation - and emphasize cash flow or EBITDA - are apt to make faulty decisions, and you should keep that in mind as you make your own investment decisions