Warren Buffet's Critique on EBITDA

EBITDA is a flawed method of measuring a company's value, according to Warren Buffet:

1. Flawed Depreciation & Amortization - Spreading the cost of something over several years may not be beneficial, as it only delays tax gains. Getting a dollar today is better than getting one tomorrow.
2. Hidden Costs - Important costs such as debt from restructuring and stock-based compensation are often not considered in EBITDA, misleading investors
3. Potential Manipulation - Experienced CFOs can easily manipulate EBITDA, making it a malleable metric that does not accurately reflect a company's financial health.