Silicon Investor (SI) -- The First Internet Community

STOCKTALK

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.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Thomas M. who wrote (84333)	10/17/2000 2:56:09 PM
From: Don Lloyd	Read Replies (2) \| Respond to of 132070

Tom - Basic accounting question: Why are interest & taxes not counted as cash flow in EBITDA? Don't these expenses drain cash reserves, as opposed to depreciation & amortization, which is fictional? I'm the wrong person to ask, as I seem to always be 180 degrees out of phase with accounting methods. -g- If a company is PAYING interest, then there are likely to be no cash reserves to drain. If it is RECEIVING interest, it is as if the company has merged with a bank, and this has little to do with the business operations of the company (assuming the company is not a bank). Taxes can also be very distorting as they often are the result of previous years' gains or losses, and do not reflect current business reality. Every company probably needs to be analyzed on its own, and not just apply a fixed formula to its finances. Regards, Don