Why do companies use EBITDA to grade performance?
400814
Earnings Before Interest, Taxes, Depreciation, and Amortization - EBITDA  \n\n\nPretty much all business use the ebitda method not only to grade but to maintain their checks and balances.\n\nEdit:\n\nI forgot to mention that if you ever (or your company) gets audited, all investigation companies will need to see how you have maintained your books and if they are in order.
512276
EV/EBITDA ratio is the Enterprice Multiple: A ratio used to determine the value of a company. The enterprise multiple looks at a firm as a potential acquirer would, because it takes debt into account - an item which other multiples like the P/E ratio do not include. A low ratio indicates that a company might be undervalued. The enterprise multiple is used for several reasons:\n\n1) It's useful for transnational comparisons because it ignores the distorting effects of individual countries' taxation policies.\n\n2) It's used to find attractive takeover candidates. Enterprise value is a better metric than market cap for takeovers. It takes into account the debt which the acquirer will have to assume. Therefore, a company with a low enterprise multiple can be viewed as a good takeover candidate.\n\nKeep in mind that enterprise multiples can vary depending on the industry. Therefore, it's important to compare the multiple to other companies or to the industry in general. Expect higher enterprise multiples in high growth industries (like biotech) and lower multiples in industries with slow growth (like railways). \n\nP/E is the Price to Earnings Ratio, also known as the price multiplier: It is a valuation ratio of a company's current share price compared to its per-share earnings. Its formula is:\n\nMarket Value Per Share/Earnings Per Share (EPS)\n\nIt basically tells you how much an investor is willing to pay for a dollar of earnings. For example, if a companyés shares are traded at $25 and its last 4 quarters earnings per share was $2, then the P/E ratio is = $12.\n\nIn general, a high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E. However, the P/E ratio doesn't tell us the whole story by itself. It's usually more useful to compare the P/E ratios of one company to other companies in the same industry, to the market in general or against the company's own historical P/E. It would not be useful for investors using the P/E ratio as a basis for their investment to compare the P/E of a technology company (high P/E) to a utility company (low P/E) as each industry has much different growth prospects.
256792
Transactional accounting is about recording the financial events of the business according to acceptable practices.  The accuracy of those records is important, even critical.  However, they aren't the managerial tool the organization needs or wants.  The purely financial representation and analysis of business results doesn't tell the full story.  While marketing is an "expense" under financial accounting treatment, managerially it is an investment.  There are other such examples of scorekeeping versus results measurement.\n\n\nBusinesses need both scorekeeping and results.  Businesses get results from gaining a managerial understanding and perspective on the numeric representation of the business.  Businesses also must recognize information beyond the numbers.  There are events, factors, and decisions that aren't captured real-time by the financial results.  The organization which has the capability to address the non-financial aspects of the business in the context of their ultimate impact on financial performance is the one that will be able to generate significant financial results.\n \n\nEvery activity in the organization ultimately generates cash, uses cash, or both. The results are either direct or indirect from each activity.  For instance, manufacturing a product is a direct use of cash for raw materials, purchased parts, and labor. The ordering of the raw materials and purchased parts is not directly related to the conversion into a finished good - but is a necessary activity to the organization.  The purchasing and manufacturing processes both play a role in producing a product for sale.  Both use cash.  Both ultimately contribute to generating cash.  Either process executed poorly impacts the sales process and the bottom-line.\n\n \n\nThis becomes the question:  what is the measure of results for each group?  How is purchasing performance measured?  What metrics does manufacturing have to meet?  How are sales people evaluated?\n\n \n\nNumbers should be incentives to perform and a means of identifying results.  The results measured must be meaningful to the business and to the performer.  When members of the organization view accounting measures as an obstacle and not as a tool for achieving results, setting priorities, and measuring performance, then it is time to reevaluate how the numbers are being used and determine how to generate relevant metrics which drive the organization forward.  Relevant metrics are necessary; merely keeping score doesn't benefit the organization.
233923
Part of the reason for the attraction for provision accounting is that it helps income smoothing, ie in good years, you can provide for a rainy day so to speak....\n\nThe new accounting standards - I'm taking it that you are talking about IFRS is more balance sheet oriented, so the provision has to justify itself as either as an asset or liability - and if it fails that gets caught into the income statement.\n\nFrom an analysts perspective, provisions need to be stripped off to understand the inherent core profitability of the firm. So in a sense I like the direction the new accounting standards are moving.\n\nYou can read more about income smoothing in a good forensic accounting book or the book titled "Financial Shenanigans"
41259
if the company operates in different parts of world, then using ebusiness is a huge advantage for it.\n\n* purchase orders can be send with secured protocol to different office.\n\nit is also helpful for faster communication between different sites.
115311
They're not gaining in popularity.  They have always been used.  NPV is the best and most informative investment analysis method to use.  If you calculate the inputs properly (such as the firm's cost of capital) it is the most accurate method to use to evaluate various investment alternatives.\nA firm should Always choose projects that generate a positive NPV.\nIRR isn't such a great measure because of its biggest assumption, which is that the cash flows generated by the project can be reinvested at the IRR, which is a very unrealistic assumption to make.
416856
Dear sir,\nI strongly disagree with the answers you have received,\nIn my opinion, all the data is available elswhere as well. \nThe only thing is, D&B have credi scores, which is their own product and you will probably not find it unless you buy the report. Yet, as it seems, you don't really need it. \n\ncompany size, fleet size, number of employees. distribution channles, revenues, expenses, produc listings -- all this info is availalbe in one form or another online. D&B analysts actually receive the information from the companies or other providers, so I suggest that you specify the company you aer looking for. I can try finding the info for you :)
905859
Excellent Question!!! I'm truly putting this on the watchlist.. because I can't really come with something witty right now... don't take this from me okay? I'm just brainstorming with you: How about saying that given that the company itself has a "sterling" reputation... I look forward to contributing to it with quantitative and community contributions through my enthusiasm, team spirit and hardwork... (cause they like results, eh?)... So in plain terms what you're here for is to deliver results that forwards their company.. after all.. every bit of effort definitely helps! Does this help? I'm still staying tuned to see other answers!! Good luck!
468760
Assets = liabilities + equity\n\nThis formula works because a firm will have certain assets, and anything that they don't owe is value for the shareholders.\n\nFor example, on a company with pure cash of 10 dollars.  If the liabilities are 5 dollars, then the leftover 5 is value to the person who owns the company.  Theoretically, if the company got sold at 100% efficiency, there would be 5 dollars left, so the owners have a total value of that 5 dollars.
166779
Its a good company, why don't you send a query to a rating agency say www.fitchindia for instance or CRISIL
1079790
There is no difference in the US in accounting methods for publicly traded companies. They must all conform to GAAP\n(Generally Accepted Accounting Principles)
21305
Many firms use machines as tax write-offs.\n\nA new machine is purchased when an older one "falls off the books" or it's depreciated value is reduced to zero.\n\nMy firm turns computers and printers every 2 years to keep up with technology and software advances.  We also purchase after the new technology is 6 months old, so we avoid being the beta testers!
462795
I guess it is because to interpret something you need a baseline or standard to compare your result with ... finding such a standard would be why you would use a database
541067
good question ..similar to the average sal in your company ..0 ..they do it for charity
718389
It's based on the revenue of the company for the last year.  The largest ones get on the list.
665063
I'm not exactly sure what your question is.  I'm guessing you are talking about something like Accounts Receivable or Accounts Payables. Companies set up different accounts to keep track of each customer or supplier.  \n\nCompanies set up different Payable accounts for people who they owe money to, so they can determine how much they owe to each person and if it has been paid.  All the Payable accounts together add up to the amount owed to suppliers. It also makes it easier to keep track of expenses. \n\nLikewise with Receivable accounts, different accounts are set up to show which customer has made purchases, how much has been paid, and how much they still owe.  This is a good way to keep track of revenues.
358870
In my experience, nothing is relevant to a performance appraisal.  It's all BS.  Just grin and bear it, then get it over with as soon as possible.