This finance analogy bears a strong resemblance to the partial-illusion of system, versus the down-deep cards on the table, ready-for-change reality of ecosystem… SystemOrEcosystem.com
EBITDA is the highlight reel.
Cash flow is the game tape.
This isn’t a technicality.
It’s the most important distinction in finance.
📌 Join me on May 4 @ 12 PM EST for the upcoming CEO & C-Suite masterclass to learn how to build EBITDA, Protect Cash Flow and Drive Enterprise Value: https://lnkd.in/gbMjG2pV
EBITDA is an opinion.
It starts with net income (already shaped by accounting choices).
Then adds back depreciation, amortization, interest, taxes.
All adjustable. All subject to judgment.
Add-backs for “one-time” items.
Normalization adjustments.
Pro-forma this. Exclude that.
Every number above the cash flow line can be framed.
Cash flow cannot.
Either the cash arrived. Or it didn’t.
Either it left the account. Or it didn’t.
No narrative changes that.
This is why acquirers stress-test EBITDA against operating cash flow.
This is why lenders price risk on cash coverage, not earnings multiples.
This is why the most dangerous CEOs are the ones optimizing for the number that can be managed.
Bottom line?
EBITDA tells the story you want to tell.
Cash flow tells the story that’s true.
Know the difference. Build on the right one.
——–
Ready to Scale with Full Command of your Own Numbers?
Join me inside The CEO Financial Intelligence Academy.
World-Class Curriculum, Coaching, Community.
Get your CEO Dashboard set up today.
The Spring cohort kicks off May 6.
👉 academy.oanalabes.com
