The comparative assessment based on EBITDA indicators of the activities of the holding’s divisions

Abstract

This article presents an example of using EBITDA and EBITDA MARGIN for a comparative analysis of the activities of the company's divisions. The article describes the basic model for calculating the indicators and discusses in detail the adjustments to these indicators. To conduct this study, a holding company consisting of seven main divisions that are engaged in various types of activities was selected. The aim of this study is to analyze adjustments to EBITDA and assess the effect of these adjustments. During the analysis process, the basic EBITDA and EBITDA MARGIN indicators were consistently calculated, then, based on the data on the turnover of financial accounts, adjustments were identified and analyzed, and the effects of the adjustments were revealed. The results obtained demonstrate the need for an individual approach to the financial analysis of projects using EBITDA and EBITDA MARGIN indicators, that would lead a company to making informed management decisions.