CFA Practice Question

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CFA Practice Question

Which statement is false regarding EBITDA?

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

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
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