SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Value Investing
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: TimbaBear who wrote (13857)2/4/2002 11:10:00 PM
From: Bob Rudd  Read Replies (1) of 78753
 
Operating Leases & Enterprise value - This is what I've come to so far: If operating leases aren't a substantial part of the business, just ignore them. If they are then look at a lease adjusted version of EV/EBITDA that reflects addition of the present value of the leases in EV+L *AND* adjusts EBITDA TO reflect adding back of rent which is the normal return on the leases. Just as enterprise value that includes debt has, as a denominator income that includes interest [Earnings BEFORE Interest] as payment for the debt capital, the rent expense would be added back to earnings as payment for the lease capital. So we get EVL/EBITDAR:
Not as a universal substitute for the EV/EBITDA multiple, since there's no published comparables, but as another way to look at a business where operating leases are important.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News