Which of the following statements regarding EBITDA is correct: Select one: a. A defined term in GAAP b. None of the listed answers c. A proxy for net income d. A proxy for operating income e. All of the listed answers

Respuesta :

Answer:

b. None of the listed answers

Explanation:

EBITDA means earnings before interest , tax, depreciation and amortization, whereas operating is the gross profit minus all operating costs, since depreciation and amortization, which are operating costs would have been deducted in arriving at EBITDA, it means operating income and EBITDA are not the same.

Net income is gross profIt minus interest,tax ,depreciation and amortization, hence, it is a far cry from EBITDA.

Note also EBITDA is not recognized by generally accepted accounting principles (GAAP) as a performance measure