Which of the following statements does NOT describe a valid similarity or difference between EBIT and EBITDA? a. EBIT represents core, recurring business profitability before the impact of capital structure and taxes; EBITDA is similar but corresponds to business cash flow from operations rather than profitability.b. EBIT may be more relevant when CapEx is important to the company or when you *want* to reflect the partial impact of CapEx; EBITDA is better when CapEx is less significant or when you *want* to normalize and ignore the impact of CapEx.c. EBIT deducts the full Operating Lease Expense, but EBITDA does not because of the add-back for Depreciation & Amortization.d. Both EBIT and EBITDA pair with Enterprise Value in valuation multiples, but Enterprise Value may be calculated slightly differently depending on the accounting system (U.S. GAAP vs. IFRS).e. Both EBIT and EBITDA should be adjusted for any non-recurring charges that affect Operating Income on the Income Statement.f. Using EBITDAR rather than EBIT or EBITDA would solve some of the comparability problems for both metrics, especially when comparing companies that use different accounting systems.
Which of the following statements does NOT describe a valid similarity or difference
between EBIT and EBITDA?
a. EBIT represents core, recurring business profitability before the impact of capital
structure and taxes; EBITDA is similar but corresponds to business cash flow from
operations rather than profitability.
b. EBIT may be more relevant when CapEx is important to the company or when you
*want* to reflect the partial impact of CapEx; EBITDA is better when CapEx is less
significant or when you *want* to normalize and ignore the impact of CapEx.
c. EBIT deducts the full Operating Lease Expense, but EBITDA does not because of the
add-back for
d. Both EBIT and EBITDA pair with Enterprise Value in valuation multiples, but
Enterprise Value may be calculated slightly differently depending on the accounting
system (U.S. GAAP vs. IFRS).
e. Both EBIT and EBITDA should be adjusted for any non-recurring charges that affect
Operating Income on the Income Statement.
f. Using EBITDAR rather than EBIT or EBITDA would solve some of the comparability
problems for both metrics, especially when comparing companies that use different
accounting systems.
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