3 Questions
Which of the following best defines EBITDA?
Net income plus interest, taxes, depreciation, and amortization
What is the formula for calculating working capital?
Current assets - current liabilities
Which of the following is a common use of EBITDA?
To evaluate a company's operating performance
Study Notes
Financial Metrics
- EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a financial metric that measures a company's profitability, excluding non-operating items.
Working Capital
- Working capital is the difference between a company's current assets and current liabilities, calculated using the formula: Working Capital = Current Assets - Current Liabilities.
EBITDA Use Cases
- A common use of EBITDA is to compare the financial performance of companies with different capital structures, taxation, and depreciation policies, as it eliminates these variables.
Test your knowledge on EBITDA and working capital with this comprehensive multiple choice quiz! Covering 50 questions, this quiz will challenge your understanding of EBITDA - its definition, calculation, and common uses - as well as working capital formula. Sharpen your financial skills and see how well you perform in this quiz!
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