EBITDAC enters the Vocabulary
With the Coronavirus crisis continuing to put pressure on businesses, regulators and governments and with people still (mostly) locked down, it’s good to see that the crisis seems to have brought out some special creativity. As reported pretty widely, a few brave companies, whether in an act of special creativity, or because they just wanted to make us laugh, have constructed a new financial term – EBITDAC. That’s Earnings Before Interest, Tax, Depreciation, Amortisation and Covid!
Revenues have plunged because your customers have stayed at home? No problem, just report EBITDAC by adding back into your earnings what you wished you had earnt!
As expert Sabrina Fox, executive adviser at the European Leveraged Finance Association, comments in an item in the Financial Times “It’s a bit ironic to say we’re adding back the effects of Coronavirus to deal with the effect of Coronavirus”!
Well — quite! Now where had we read something about Non-GAAP metrics? Still – it made us laugh!
{Ed — Great to hear from members in parts of Asia this week who are getting back to normal, just with masks on!}
Here’s the FT item.
