The information associated with an Asset Token must be reliable, used without risk of error. Reliability based on four fundamental principles: neutral, legal appearance, the preeminence of economic reality over appearance and the respect for the fair value.
Earnings before interest, taxes, depreciation and amortization (EBITDA) provides an indication of the operational profitability in the short term of a business. When evaluating transactions (mergers & acquisitions), it is practical to make multiples using EBITDA as a reference price. EBITDA gives a more reliable picture of the acquired companies’ operational activity and that is why it is in their financial statements.
The result measured by EBITDA does not take into account the cost of debt or amortization of goodwill, significant acquisition is expensive when paid. It is normal to see significantly higher EBITDA to net income. EBIT is also used in the calculation of financial ratios, but EBITDA remains much exploited by the additional value it brings to the business activity.
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