Navigating EBITDA Add-Backs and Credit Cycles in Financial Analysis

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Exploring the complexities and implications of EBITDA add-backs in financial assessments, including investor perceptions, borrowing implications, and the challenges of deciphering a company's true financial condition amidst inflated numbers. The chapter also delves into the relevance of credit cycles in covenant analysis and the need for strategic adjustments during market fluctuations.

In this episode, hosts Shweta Rao and Peter Washkowitz speak to JO Hambro Capital Management’s Head of Credit Lale Topcuoglu about the consequences of EBITDA add-backs in a declining credit market, challenges faced by investors working with “fictional” numbers, Covid-19-related EBITDA adjustments and the information asymmetries in the market creating “haves” and “have-nots”. If you are not a Reorg subscriber, please request access here: go.reorg-research.com/Podcast-Trial.