EBITDA impairs comparability because it makes the one that owns look significantly better than the one that rents. So operating income would kind of strip out that depreciation expense comparison. And that's an important benefit of the lens that operating income can offer us when we're looking at a company's core business.
What’s the point of reading a company’s earnings report? Can’t AI do that job? Patrick Badolato, PhD, CPA is an Associate Professor at The University of Texas at Austin, McCombs School of Business where he teaches accounting and financial statement analysis. Badolato joined Ricky Mulvey to discuss: - How Walmart, Rent the Runway, and Peloton adjust earnings (and what it means for shareholders) - Why investors should follow a company’s operating income - The pros and pitfalls of GAAP metrics - A better way to count stock-based comp. Companies Discussed: WMT, RENT, PTON Host: Ricky Mulvey Guest: Patrick Badolato Engineer: Tim Sparks
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