What does Warren Buffett call EBITDA?

Warren Buffett famously calls EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) “butt-head earnings” or simply “BS”. He argues that it is “utter nonsense” and a misleading metric that ignores essential real costs like capital expenditures and depreciation.

What does Warren Buffet say about EBITDA?

People try to dress up financial statements with it.” “We won't buy into companies where someone's talking about EBITDA. If you look at all companies, and split them into companies that use EBITDA as a metric and those that don't, I suspect you'll find a lot more fraud in the former group.

Does Warren Buffett use EBITDA?

This preference reflects his belief that understanding the core earnings power of a business is crucial for making informed investment decisions. In summary, Buffett's preference for EBIT over EBITDA is grounded in his commitment to value investing and understanding a company's true profitability.

What did Charlie Munger call EBITDA?

Charlie Munger famously called EBITDA "bullsh*t earnings" (I don't completely agree with this). So it had me thinking about this measure of earnings and its relevance to you. Buckle in.

Is there another name for EBITDA?

EBITDA is another acronym you may see on financial statements that stands for “earnings before interest, taxes, depreciation, and amortization.” In terms of the first three terms, the breakdown is exactly the same as for EBIT.

Charlie Munger: 'Every time you hear 'EBITDA' substitute it with 'bull**** earnings''

Is EBITDA basically gross profit?

Gross Profit shows core production efficiency (Revenue - COGS), focusing on direct costs like materials and labor, while EBITDA (Earnings Before Interest, Taxes, Depreciation, & Amortization) offers a broader view of overall operational profitability by adding back non-cash expenses (D&A) and non-operating costs (Interest, Taxes) to net income, indicating cash-generating ability from core business. Gross Profit helps with pricing and cost control; EBITDA is better for comparing company performance across industries or assessing valuation.
 

What is the 8 8 8 rule of Warren Buffett?

Warren Buffett's 8+8+8 rule is a simple guideline for work-life balance, suggesting you divide your 24-hour day into three equal parts: 8 hours for work, 8 hours for sleep, and 8 hours for yourself (personal life, health, relationships, and growth), emphasizing that true productivity and success come from managing energy and balance, not just working endlessly. 

What is the EBITDA of Goldman Sachs?

Goldman Sachs EBITDA for the quarter ending December 31, 2025 was $5.923B, a 28.54% increase year-over-year. Goldman Sachs 2024 EBITDA was 20.789B, a 33.31% increase from 2023. Goldman Sachs 2023 EBITDA was 15.595B, a 2.17% decline from 2022. Goldman Sachs 2022 EBITDA was 15.941B, a 45.14% decline from 2021.

What is Warren Buffett's 70/30 rule?

The "Buffett Rule 70/30" isn't one single rule but refers to different concepts: it can mean investing 70% in stocks and 30% in "workouts" (special situations like mergers) as he did in 1957, or it's a popular guideline for personal finance to save 70% and spend 30% for rapid wealth building. It's also confused with the general guideline of 100 minus your age for stock/bond allocation (e.g., 70% stocks if 30 years old).
 

Is EBITDA nonsense?

But too often it tends to be justified with the argument that, by omitting depreciation and amortisation, EBITDA represents a better measure of profit, one that better approximates cash flow. This is nonsense. Depreciation is a very real cost. It is the cost of consuming productive capacity.

What is Buffett's favorite stock to own?

1. Coca-Cola: Quenching thirst for generations. Coca-Cola is the longest-held stock in the Berkshire Hathaway equity portfolio. It's the stock Buffett was talking about when he said his favorite holding period is forever, and he has said several times that he would never sell it.

What is the 90 10 rule Warren Buffett?

Warren Buffett has said that 90 percent of the money he leaves to his wife should be invested in stocks, with just 10 percent in cash. Does that work for non-billionaires? As far as asset allocation advice goes, 90 percent in stocks sounds pretty aggressive.

What does Dave Ramsey say about Bitcoin?

Ramsey's Simple Three-Investment Rule

In a 2024 video, Ramsey said, "I have three investments — that's all I have: my business, paid-for real estate and mutual funds. I don't play single stocks. I don't screw around with gold. I don't mess with Bitcoin."

What is Warren Buffett's #1 rule?

Key Takeaways

Warren Buffett's “one rule” is simple but powerful: never confuse a stock's price with its value. In downturns like 1966 and 2008, that principle helped Buffett beat the market and even make billions while others lost fortunes.

Why is Warren Buffett against EBITDA?

The reason these issues matter is that EBITDA removes real expenses that a company must actually spend capital on – e.g. interest expense, taxes, depreciation, and amortization. As a result, using EBITDA as a standalone profitability metric can be misleading, especially for capital-intensive companies.

What is Apple's EBITDA margin?

Apple's ebitda margin for fiscal years ending September 2021 to 2025 averaged 33.6%. Apple's operated at median ebitda margin of 33.1% from fiscal years ending September 2021 to 2025. Looking back at the last 5 years, Apple's ebitda margin peaked in September 2025 at 34.8%.

What is the Warren Buffett 5 hour rule?

It's simple: spend one hour a day, five days a week, focused solely on learning.

What are the 5 golden rules of Warren Buffett?

A: Five rules drawn from Warren Buffett's wisdom for potentially building wealth include investing for the long term, staying informed, maintaining a competitive advantage, focusing on quality, and managing risk.

What was Warren Buffett's famous quote?

“Be fearful when others are greedy and greedy when others are fearful.” Buffett's maxim isn't just smart investing advice. It's a masterstroke of messaging.

What is EBITDA for dummies?

What does it stand for? EBITDA (pronounced "ee-bit-dah") is a standard of measurement banks use to judge a business' performance. It stands for earnings before interest, taxes, depreciation, and amortisation.

Is EBITDA the final profit?

While Net Profit shows the final earnings after all expenses, EBITDA focuses only on operational profitability. Both are important, but EBITDA gives a cleaner picture of a company's operational strength.