How does EBITDA overestimates CFO if working capital is growing? Can someone explain
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EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company’s operating profitability without considering non-operating expenses like interest and taxes, or non-cash expenses like depreciation and amortization.
Here’s why EBITDA can overestimate cash flow from operations when working capital is growing: