What is recurring EBITDA and how is it calculated?
Recurring EBITDA, a metric calculated as EBITDA exclusive of certain nonrecurring items, provides a further tool to evaluate ability to incur and service debt and to fund dividends and other cash needs. Our computation of Recurring EBITDA may differ from the methodology utilized by other companies to calculate Recurring EBITDA.
What are the different types of EBITDA adjustments?
The bulk of the adjustments are often different types of expenses that are added back to EBITDA. The resulting adjusted EBITDA often reflects a higher earnings level because of the reduced expenses. Common EBITDA adjustments include: Owner's compensation that is higher than the market average (in private firms)
What is an example of EBITDA?
For example, if a company has a large amount of depreciable equipment (and thus a high amount of depreciation expense), then the cost of maintaining and sustaining these capital assets is not captured. EBITDA is short for Earnings Before Interest Taxes and Depreciation.