Ebita is Earnings, Before, Interest, Taxes, and Amortization. It’s become a favorite metric of Wall St. and leaders to determine the stock value of a company. As senior leaders started getting much of their compensation from stock options (based on a rising share price) they became obsessed with ebita. Although it’s an effective management tool, it causes creative constipation for leaders who naturally become obsessed with how short term costs hit ebita blinding them like a setting sun shining through a dirty windshield as they drive the winding highway of an unsustainable future. When the means become the ends, real growth slides off the road and gets buried in the dark forest of competition.
EBITA’S A TOOL, NOT THE OBJECTIVE!