“ebitda” — scripture for the leveraged optimist
profit is negotiable. adjustments are infinite.
cold open
six letters that turn losses into legends. whisper them during a down-round—watch investors recalibrate their righteous anger into curious term sheets.
the anatomy of earnings alchemy
E – earnings (but only the fun parts).
B – before we acknowledge pesky interest.
I – ignore the taxes, we’ll handle those… later.
D – depreciation? sentimental accounting.
A – amortisation: memory-holed expenses.
each subtraction is an act of financial Photoshop—blemish removal for balance sheets.
cash is king; ebitda is the royal court magician.
cash-flow theatre vs. accrual assault
ebitda seduces founders because it weaponises omission. it seduces analysts because no one gets promoted for pessimism.
the metric is a mirror—revealing who’s willing to squint hard enough to see growth in a gap.
72 % – public tech firms highlighting “adjusted ebitda” in earnings decks
4.6× – median multiple paid on ebitda in recent SaaS deals
$0 – free cash required to impress a spreadsheet if the cells are formatted right
leverage protocol
drop the term in a diligence call. if the banker nods, leverage awaits.
if they ask for operating cash-flow, run—your theatre just met a fire marshal.
we don’t bend reality.
we spreadsheet it.
footnote on post-truth accounting
eventually the amortised ghosts hit the income statement; but until then, ebitda keeps hope liquid and covenants compliant.
closer
say it once. watch burn rates relax. then decide whether to tighten the belt—
or tighten the slide deck and raise again.