EBITDA vs Free Cash Flow - Investment Banking Interview Qs

In this video, we cover the concepts of EBITDA vs Free Cash Flow. Finance students often learn EBITDA as an abstract concept but can't connect across to the Free Cash Flow calculation. In our explanation, we draw a conceptual bridge between the two concepts to help clarify why EBITDA is called a 'Free Cash Flow Proxy' and what EBITDA is missing relative to the Free Cash Flow calculation. Master the Critical Concepts you'll need to break into Investment Banking or Private Equity with our Courses: https://courses.finance-able.com/ Learn how to answer interview questions from a former Investment Banking (UBS LA), Private Equity (Golden Gate Capital + HIG Capital) and Investment Management ($200B Mutual Fund / $2B Hedge Fund) practitioner…and Adjunct Professor in Columbia Business School’s Value Investing Program who has trained thousands of current IB/PE/HF/MF professionals. If you'd like to see more of our content, please subscribe and follow us on Twitter (@financeable1). 00:00 – Intro 00:09 – Video Context & Overview 00:23 – EBITDA Concept Review 01:03 – EBITDA is Proxy for Free Cash Flow 01:20 – Free Cash Flow Formula Introduction 01:42 – Free Cash Flow Formula Deep Dive 02:31 – Comparing EBITDA and the Free Cash Flow Formula 03:03 – EBITDA excludes Capital Expenditures and Working Capital (also known as 'Capital Intensity') 03:27– Defining 'Capital Intensity' in simple terms 04:32 – Wrap-Up Hope this is helpful and let us know if you have any questions in the comment section below. Aiming for Investment Banking, Private Equity, or Investment Management Roles? Ramp up faster with our (free) Finance Analyst Starter Kit! - https://finance-able.com/analyst-star... ©2021, finance|able, All Rights Reserved #InvestmentBanking #PrivateEquity #HedgeFunds #FinanceInterviews #Valuation #EBITDA #FreeCashFlow