COVID-19 Impact on EBITDA

Field: Auditing | Delivery Method: Self Study | CPE Hours: 1.0

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The COVID-19 virus has had a profound effect on the world economy. One important consideration of the pandemic is its impact on a company’s enterprise value. As a result of the coronavirus pandemic, a new financial metric for measuring profitability has emerged – EBITDAC (Earnings Before Interest, Taxes, Depreciation, Amortization, and Coronavirus).

As the coronavirus pandemic spread, the profitability of many organizations was directly or indirectly impacted. Many businesses were forced to close or shelter-in-place. Other entities found it difficult to source material and in turn were unable to fulfill customer orders. Still other companies were unable to pivot to a remote workforce and suffered a decline in revenues.
The addition of the ‘C’ to the traditional EBITDA metric is meant to quantify a company’s losses attributed to the coronavirus pandemic. Examples of potential “coronavirus” adjustments include:
  • Lost revenues and profits
  • Disruptions to workforce (including employee severance or “combat pay” bonuses
  • Lease termination costs
  • Disruptions to supply chain (cost increases, expedited freight, etc.)
  • Declines in efficiency due to remote work environment

This session will evaluate the purpose and use of the EBITDA measurement and the addition of the “C” component due to the coronavirus. We will examine what considerations organization may make when using this metric for merger and acquisition activity or simply management strategy forecasting.
Lesson Objectives
  • Explore the purpose and definition of EBITDA.
  • Examine other measures used in conjunction with EBITDA.
  • Consider the impact of EBITDA prior and post COVID.
  • Identify proper methods to recast your financial information for forecasting purposes.

Field: Auditing
CPE: 1
Delivery Method: Self-Study
Format: Video

Your Instructor

Lynn Fountain
Lynn Fountain

Consultant, CPA, CGMA, CRMA, MBA, Past Chief Audit Executive

Business Consultant, Trainer, Author

Ms. Fountain has over 40 years of experience spanning public accounting, industry accounting and consulting. Sixteen years of that experience has been in the field of internal audit, risk managment and process improvement. She is well adept to assist your organization evaluate business strategy, perform risk assessments, establish a Sarbanes-Oxley process, synergizing internal audit processes or perform process improvement projects.

As a past corporate executive Lynn has a passion for working with professionals to enhance their processes and provide leading edge education. She has authored and delivered hundreds of training courses for accounting, finance and audit professionals. Her training is filled with not just theory but real world application.

Ms. Fountain has authored three technical publications:

-Leading the Internal Audit Function 

-Raise the Red Flag

-Ethics and the Internal Auditor's political dilemma

Lynn is a recognized leader in the internal audit profession as well as a recognized business professional.  

Ms. Fountain obtained her BSBA from Pittsburg State University and her MBA from Washburn University in Kansas. She has active, current CPA, CGMA, and CRMA credentials.

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