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Financial Intelligence, Revised Edition
book

Financial Intelligence, Revised Edition

by Karen Berman, Joe Knight, John Case
January 2013
Beginner content levelBeginner
272 pages
6h 32m
English
Harvard Business Review Press
Audiobook available
Content preview from Financial Intelligence, Revised Edition

Part Four

Toolbox

FREE CASH FLOW

Several years ago, Wall Street’s favorite measure was EBITDA, or earnings before interest, taxes, depreciation, and amortization. Banks loved EBITDA because they believed it was a good indication of future cash flow. But then came a double whammy. During the dot-com boom of the late 1990s, companies such as WorldCom turned out to have cooked their books. So their EBITDA figures were not reliable. When the financial crisis hit in 2008, investors and lenders grew even more wary of any metric tied to the income statement. They realized that income statements are loaded with estimates and assumptions, and that profit shown on these statements is not necessarily real.

So now there’s a hot new metric on Wall Street: ...

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Publisher Resources

ISBN: 9781422144121