Another Twist for EBITDA--"EBITDAC": The Impact of COVID-19
July 28, 2020
It ain’t what you don’t know that’s the problem, it’s what you think you know,
but just ain’t so….Mark Twain
Even before the economic crisis caused by COVID-19, lenders were wrestling with the ongoing requests from borrowers for adjustments to EBITDA for purposes of financial covenants in credit agreements.
Recently, lenders have confronted proposals for modifications to EBITDA allowing management to add back losses arising from the economic impact of COVID-19. This has become known as “EBITDAC” with the “C” representing the financial consequences of the coronavirus pandemic. The Credit Roundtable has said: “We believe EBITDA calculations include many hypothetical, highly subjective and potentially misleading adjustments.”
See more on this topic in the article on this subject here.
