- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Investments
- Learning Module 41. Equity Valuation: Concepts and Basic Tools
- Subject 6. Enterprise Value
CFA Practice Question
Which statement is false regarding EBITDA?
B. It can be viewed as a source of funds to pay interest, dividends, and taxes.
C. It does not include any non-cash expenses and non-cash revenues.
A. It is a proxy for operating cash flow.
B. It can be viewed as a source of funds to pay interest, dividends, and taxes.
C. It does not include any non-cash expenses and non-cash revenues.
Correct Answer: C
B is true, because it is calculated before any payments are made to any of the company's financial stakeholders.
C is false. It may include non-cash expenses and non-cash revenues.
A is true, as it excludes depreciation and amortization.
B is true, because it is calculated before any payments are made to any of the company's financial stakeholders.
C is false. It may include non-cash expenses and non-cash revenues.
User Contributed Comments 1
| User | Comment |
|---|---|
| davidt876 | point here is that it is a 'proxy' for CFO - not equal to it |