EBITDA as operational performance measure, explaining its use in credit assessment, valuation, and DSCR analysis.
EBITDA is used as a measure of operational performance by starting with net profit and excluding financing choices and accounting conventions that do not reflect core business activity. The concept is presented as a cleaner indicator of what a business generates from its primary operations. It is relevant in bank and credit assessments, business valuation, internal performance tracking, and in relation to DSCR in a CMA report, where both measures assess cash generation from different perspectives. (AI Summary)