Warren Buffett and his partner Charlie Munger famously refer to EBITDA (earnings before interest, taxes, depreciation, and amortization) as "bullshit earnings". They strongly dislike the metric, often calling it "meaningless," as it omits critical costs like depreciation and capital expenditures, making it a "very misleading statistic".
This preference reflects his belief that understanding the core earnings power of a business is crucial for making informed investment decisions. In summary, Buffett's preference for EBIT over EBITDA is grounded in his commitment to value investing and understanding a company's true profitability.
Charlie Munger famously called EBITDA "bullsh*t earnings" (I don't completely agree with this). So it had me thinking about this measure of earnings and its relevance to you. Buckle in.
EBITDA is another acronym you may see on financial statements that stands for “earnings before interest, taxes, depreciation, and amortization.” In terms of the first three terms, the breakdown is exactly the same as for EBIT.
Warren Buffett's 8+8+8 Rule is a concept for a balanced life, suggesting dividing your day into three equal 8-hour segments: 8 hours for work, 8 hours for sleep, and 8 hours for yourself (personal growth, family, health). While it emphasizes smart work and rest for productivity, critics note real-life factors like commuting and chores can make perfect balance challenging, but the core idea promotes intentional time management for well-being and success.
Goldman Sachs EBITDA for the quarter ending December 31, 2025 was $5.923B, a 28.54% increase year-over-year. Goldman Sachs 2024 EBITDA was 20.789B, a 33.31% increase from 2023. Goldman Sachs 2023 EBITDA was 15.595B, a 2.17% decline from 2022. Goldman Sachs 2022 EBITDA was 15.941B, a 45.14% decline from 2021.
“People who use EBITDA are either trying to con you or they're conning themselves. Telecoms, for example, spend every dime that's coming in. Interest and taxes are real costs.” Like taxes, paying interest on borrowed money doesn't affect business operations, but it certainly affects the magnitude of earnings.
Coca-Cola's ebitda for fiscal years ending December 2020 to 2024 averaged 13.553 billion. Coca-Cola's operated at median ebitda of 13.601 billion from fiscal years ending December 2020 to 2024. Looking back at the last 5 years, Coca-Cola's ebitda peaked in September 2025 at 16.307 billion.
Warren Buffett's #1 rule of investing is famously simple and stark: "Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.". This principle emphasizes capital preservation and avoiding significant losses, suggesting that protecting your principal is more crucial for long-term wealth building than chasing high, risky returns. It means focusing on buying good businesses at fair prices, understanding what you invest in, and being disciplined to prevent large, permanent losses, even if it means missing out on some fast gains.
Lesson 7: EBITDA Explained
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It calculates net income after accounting for taxes, depreciation, interest, and amortization.
Ramsey's Simple Three-Investment Rule
In a 2024 video, Ramsey said, "I have three investments — that's all I have: my business, paid-for real estate and mutual funds. I don't play single stocks. I don't screw around with gold. I don't mess with Bitcoin."
The reason these issues matter is that EBITDA removes real expenses that a company must actually spend capital on – e.g. interest expense, taxes, depreciation, and amortization. As a result, using EBITDA as a standalone profitability metric can be misleading, especially for capital-intensive companies.
Costco Wholesale's ebitda for fiscal years ending August 2021 to 2025 averaged 9.662 billion. Costco Wholesale's operated at median ebitda of 9.845 billion from fiscal years ending August 2021 to 2025. Looking back at the last 5 years, Costco Wholesale's ebitda peaked in November 2025 at 11.398 billion.
Warren Buffett's core golden rule for investing is famously stated as: "Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.". This emphasizes capital preservation and avoiding excessive risk, while also encouraging a focus on long-term value, investing in understandable businesses, and maintaining emotional discipline.
The Rule of 69 is a simple calculation to estimate the time needed for an investment to double if you know the interest rate and if the interest is compounded. For example, if a real estate investor earns twenty percent on an investment, they divide 69 by the 20 percent return and add 0.35 to the result.
Buffett has warned in the past that crossing a ratio of 200% -- meaning stocks, measured by market cap, are worth twice as much as U.S. gross domestic production (GDP) -- is like playing with fire.
A common approach to estimating your business's value is the Earnings Multiple Method. Essentially this is Earnings times a multiple. For example, if a business earns $1 million per annum, and the multiple is 3 times, then the value is $3 million. This will then be adjusted to allow for Assets and working capital.
High-end items (e.g., watches, cars, yachts) can have valuations manipulated through fictitious invoices or staged private sales. Criminals artificially raise or lower reported prices, disguising illicit proceeds as legitimate gains or concealing true wealth.