Ann: Isentia AGM Chairman and CEO Addresses and Trading Update, page-67

I actually use EBITDA minus interest, tax, capex and intangible spending to derive at my own Owner Earnings (OE)

@zhanginu,

Interesting, approach.

But all you really have done is merely replicated the P&L Statement, but with Depreciation replaced by Capex and Amortisation replaced by Intangible Spending.

And given that the very purpose that the accounting standards advocate the use of Depreciation and Amortisation is to provide some sort of smoothing effect on company financial performance, of capital expenditure and acquisition of Intangibles, which can be very lumpy.

Your approach will have the effect of over-stating financial performance when the capex cycle is at a low point (ie., when capex is less than depreciation and spending on intangibles is less than amortisation) and under-stating earnings when the capital cycle is at a high point (i.e., when capex exceeds depreciation and intangibles spending exceeds amortisation).

So I'm not quite sure how it benefits you.