In this video, we run through the first part of an important wealth equation for entrepreneurs who are looking to scale and exit their business in the future.
This first part of the equation is an acronym that needs to 'roll off your tongue' if you are to sound like a seasoned entrepreneur: and that acronym is:
EBITDA
(Watch the video to hear how to pronounce, it if you want to sound uber-pro!)
What does EBITDA stand for?
EBITDA stands for: Earnings Before Interest, Tax, Depreciation and Amortisation.
So you are basically stripping out all accountancy related adjustments in your business income statement (P&L) to drill down to your true earnings and business performance. That's what investors and potential acquirors are interested in.
This is only the first part of the wealth equation as explained in the video - the second part will be covered soon :)
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