Warren Buffett on EBITDA

“Trumpeting EBITDA is a particularly pernicious practice. Doing so implies that depreciation is not truly an expense, given that it is a “non-cash” charge. That’s nonsense. In truth, depreciation is a particularly unattractive expense because the cash outlay it represents is paid upfront, before the asset acquired has delivered any benefits to the business. Imagine, if you will, that at the beginning of this year a company paid all of its employees for the next ten years of their service. In the following nine years, compensation would be a “non-cash” expense- a reduction of a pre paid compensation asset established this year. Would anyone care to argue that the recording of the expense in years two through ten would be simply a bookkeeping formality?”-wrote Warren Buffett

Every business is manmade

“Every business is manmade. It is a result of individuals. It reflects the personalities and the business philosophy of the founders and those who have directed its affairs throughout its existence. If you want to have an understanding of any business, it is important to know the background of the people who started it and directed its past and the hopes and ambitions of those who are planning its future.”- – Thomas Rowe Price Jr

What is the magazine business?

What is the magazine, business? It is a business where our main, activity is
chopping down millions and millions of trees, flattening the pulp and printing
hieroglyphics and images on both sides of it. Then we send the end product
out in diesel-guzzling trucks to shops where perhaps 60 per cent of them
sell to customers. We then pile the remaining, unsold magazines into more
diesel-guzzling trucks and take them to a plant where they are either
consumed as fuel, buried or shredded, or used to make cardboard boxes for
refrigerators. That’s the magazine business.-Felix Dennis