July 23rd, 2009
12:05 PM GMT
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(CNN) – The Quest Means Business team has been tasked to try and explain business jargon to its viewers.

We are often guilty of throwing terms around when talking about company results that are difficult to explain in a sentence or two.

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is one of those for me.

So I was pleased to delve into it, not only to try and explain it, but also to really get my head around it. Why did companies publish EBITDA figures during the dotcom bubble era? Why do few companies use it now? Why is it not acceptable under so-called U.S. Generally Accepted Accounting Principles (GAAP)?

Ok, I will try and explain it again. Basically (and really basically) it’s a way to express a company’s earnings (the same as net income or profits or the “bottom line”) in a given period. But it is a number that is expressed before the company strips out recurring charges or costs like taxes, interest paid on debt, the loss of value of assets etc. (If I write anymore, I will confuse myself).

Companies use EBITDA (and ITDA and other complication formulae) especially when the number is positive while all others may be negative: “Company X lost six billion dollars last quarter, but EBITDA grew 15 percent!”

To be fair it is a way to try and show a consistent number if a new company is growing fast and spending huge amounts of money so it has no hopes of turning a profit. That is why it became a popular number during the late 1990s.

Today, private equity likes to look at EBITDA figures during a potential takeover because it helps to clarify a company’s underlying ability to earn money.

Is it any clearer to you now?

If not, the video below shows me trying to explain it to a classroom full of children.  They were enthusiastic to learn and were shouting “EBITDA” when we packed up to leave their London school.



July 16th, 2009
07:13 PM GMT
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First it was Goldman Sachs,  Now it's JP Morgan Chase. The banks are making billions of dollars again...and planning bonuses galore!

At one level we should,  of course, celebrate the survival of the banking system. Like it or not, we need banks to make the economy function. But it is a bit galling; just months after they had to be bailed out with hundreds of billions of dollars in cash, that they turn round, hand back the money and start raking it in hand over fist.

All at a time when they are still refusing to lend to consumers, and more and more people are losing their jobs. It is inevitable that we should feel perhaps bitter about this when the outlook is so grim. …the collateral damage as the military might say.

So I say to the Banks – remember,  you survived because of the taxpayer cash,  not in spite of it.

Nothing will enrage us more than having our noses rubbed in an orgy of bonuses and excesses while we dig ourselves out of the crises.  It is something that few of us will forgive. Will you ?



June 19th, 2009
07:31 AM GMT
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June 9th, 2009
07:44 AM GMT
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June 3rd, 2009
07:38 PM GMT
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Tonight’s Profitable Moment – greed is not pleasant to witness and never more so when exhibited by oneself.  In this case when I have been playing the fruitless game – If Only!

Back in January I bought 1,000 Barclay shares at 63 pence. Pretty much at the low point in the market. Since then I have kept you informed about the profits on these shares – More by good luck, I bought at the bottom of the market and am now showing a tidy sum. enough to buy muffins around the office ... muffins enough probably for the whole building

I did this experiment to show you in real terms examples of money being made and lost on volatile stock markets at times of recession. This demonstration has worked better than I could have hoped.

Unforutnately today I am concentrating not on the money I have actually made – but rather on the profit I could have made if I had bought more shares.

I keep thinking IF ONLY I had bought 10 times as many shares I would have oh, so much more money in the bank. IF ONLY I had ridden the market up and down, selling and buying back earlier, I would have more shares and more profits.

In the past few days Barclays’s share prices has come back by about 15 percent – because of the sale by Abu Dhabi investors. Again I am again IF ONLY, if only I had known about this proposed sale then of course I could have sold high and bought back low. (I am distresed, of course, that they seem to have made more than £1.4 billion in less than a few months; rumoured to be the fastest profit ever made in the London market.)

IF ONLY this. IF ONLY that. Often it seems my entire financial strategy is based on the mantra, coulda – shoulda, woulda.

It is pathetic that often I fixate on the money I have not made, rather than the real money I have put into the bank. This has nothing to do with profitable investing. It goes against everything I was ever taught about long-term value investing.  It is greed pure and simple.



May 25th, 2009
07:53 PM GMT
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Tonight on the show we launched JobQuest – in the months ahead we are following several people who are out of work and seeking jobs Through their eyes we will gain an understanding about what its like to be looking for work in the worst recession for a century.

There is Jason in Atlanta and Jenny in Hong Kong. Jenny moved there from Ireland. Both are very quickly finding out how hard it is to get work. We will be following them in the weeks ahead.

Why are we doing this? Because with unemployment in developed economies likely to hit more than ten per cent it is crucial the rest of us understand the strains this puts on the people and on society.

And for those of us lucky enough to keep our jobs find we are grateful to be working longer hours for less money.

In all cases, It creates a fear that corrodes and eats into all of us.

It is true – most of us spend all we earn. We are usually a paycheck or two away from financial trouble. And if we stop earnings it isn’t long before financial trouble comes knocking.

The experts tell us we should have upto six months worth of salary as savings for the "rainy day."  Nice if you can – but I know of no-one who has that much spare cash laying around "just in case."  

We all have a family member, a friend, a neighbour who has lost a job – sometimes we have all three. Which is why we are taking this so jobless crises so seriously..because they are soon facing financial problems. 

What do you think is the right level of financial cushion ? One month ? Two ? Six months – or are you going to tell me: Quest – get real. We live hand to mouth.



May 22nd, 2009
09:32 AM GMT
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April 27th, 2009
07:53 PM GMT
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I have a general rule in business journalism – never count dollars before lives. (Always worry about the effect on people before balance sheets or bank accounts.) I have been trying to stay close to this mantra as I cover the swine flu crisis. I am finding it hard to do so this time.

Because while the death and suffering of those who have caught the flu must be paramount, I can't forget that this crisis is taking place in the first global recession for 60 years.

The IMF is forecasting a downturn of at least 1.3 per cent globally, with much worse numbers in developed countries like the U.S. where the downturn could hit 3.5 percent this year.

According to the World Bank report two years ago, industries that are most affected are those like hotels, travel, tourism and restaurants. The very industries that have felt the brunt of the recession. So while there is never a good time to have a pandemic, this is a stunningly bad time.

When the EU health commissioner says that people should rethink travelling to Mexico AND the United States, then we are in getting into deep trouble. The transatlantic market is the most important single travel market in the world.

And, heaven forbid, if the crisis worsens in the U.S., so people are put off domestic travel – well,  the global slump which might have been slowing down, could get worse again.

A quick question for you. Have you changed your plans at all? or are you intending to take any special measures? Wear masks? I would like to know.



April 24th, 2009
07:29 PM GMT
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A Friday Profitable Moment....Just for the readers of this Blog.

All week we have reported horrible economic news – whether it's Britain's tax the rich budget, or Spain's double digit unemployment. We have been battered by US company results and beaten up by the IMF telling us it's the first global recession since the second World War. The losses will rack up to more than $4 trillion dollars. Phew. That's a lot to take in over one week.

There is so much to worry about that it's hard to switch off at the weekend. We can try and escape but there are always the nagging worried of bills unpaid, jobs at risk and financial dangers ahead.

But the weekend is now upon us, and I asked on the show, whether or not you would be worried by money this weekend. Here are some of your thoughts. Let me know whether you are worried, and what you can do about it.

I am in Paris this week, filming, but I hope that whatever you're upto this weekend (a brisk walk, some gardening, a bit of shopping) It's profitable !

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jade59@richardquest No we will not worry about money this W-E,we learn a while ago worrying won't change a thing,W-E is a break,so we'll have one

qM@richardquest I don't worry about money. I worry about the lack of money!

Gotaclue@richardquest No. It's not as though I'm going to buy a new Rolex this weekend.

swortman1@richardquest i worry about money all the time. prices keep going up and there not showing sign of going down.

healthysalone@richardquest No. Worrying is a pointless activity regardless of the situation. I know of no situation that has changed because I worried.

eastcoastjac@richardquest I do not worry about money – I have more than enough to meet my needs. Positive thought and Law of Attraction in action.

boezel@richardquest NO! From a terrace in the Netherlands

jbtorres@richardquest with all of the recent company financial reports, I should worry

ixVintageKissxi@richardquest I think that it's hard for people not to be worried about money right now. Very few people have that luxury anymore about money everyday until the recession ends.

boxtersushi@richardquest nope! About to run to the bank for our weekly cash (since beginning of year cash only excl travel) now tons of money on hand!

Gatorfitz@richardquest Not Worry, I wiiJust watch what I spend and be smart.

woodythehawk@richardquest Affirmative!!! I am on a fixed US retirement income and living in Egypt, and the end of the month is drawing near.

Tacarigua@richardquest Money is no problem - the problem IS money.

PepsiZecoon@richardquest We might be tight on budget, but we do manage. So I myself, won't.

javiaven@richardquest Worry? Why worry? I'm going skydiving! Like the economy! Gerooonimoooo!!!!

mananqureshi@richardquest We worry about money every weekeend richard1 where it goes! heaven knows! (giggle)

Rikki_ND@richardquest What's the point in worrying? Economies are cyclical and we will recover from this too, we've been through worse and survived!

R_P_Perry@richardquest They can't take money I dont have. No need to worry I have a shotgun and enough food for the weekend Should be fine come Mon

buklah@richardquest I find myself worrying,itsnot something I can help. Will I lose my job, Can I afford my standard of living? Can I pay my bills

foxybacon@richardquest I must admit that I am not majorly worried about it. Que sera, sera. Whatever will be, will be :o)



April 16th, 2009
08:17 PM GMT
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On Friday in Sweden, a court ruled on whether several defendants are guilty in the Pirate Bay case of Internet file sharing.

The issue isn't new. When we file share are we guilty of stealing? Or is it our right to do this – after all we bought the music, or film in the first place. It seems the digital age has led us into temptations and acts that we would never dream of if in a traditional shop. We don't shoplift from our local grocery or music store but – whoops – go online and everything is up for grabs.

My view is that most people do this because they don't have any personal interest that they've seen stolen online. They don't have property worth protecting from illegal downloads so they can't relate to the anguish this causes. The key time of course is when it's YOUR copyrighted work at risk. Because I guarantee you – if You have a hit song, or copyrighted piece that was being shared "willy nilly" Ha! You'd scream long and loud for compensation.

I am not pure here. Let me own up to the fact that in the early days of p2p sharing I did my fare share of unauthorized loading up the digital player ... Morpheus, Napster, yup – I did 'em all.

I don't like paying for downloads anymore than you do. But these days I do recognize someone wrote, performed or distributed this song. And yes – it wasn't me.

You on other hand have some very different views ... join the debate below.

==========================================

Ladidairo@richardquest One feels guilt for about 2 nano-secs, then u figure u got one over on the big cats!

Ignacious@richardquest In these hard economic times, how are we supposed to survive without Pirate Bay.org? Whose worried about downloading movie

Agromilia@richardquest You just found out about double standards in morals!!! I knew it already!!!

mommaude@richardquest Copying is one thing downloading is another. someone allowed you to download. 2009 if they don't want you to have it block it

jehahn@richardquest internet file sharing is a lot like shoplifting

twistedviewed@richardquest Companies use file sharing all the time with software etc. so what is so different with movie files, software has copy rights

SergioFlores_@richardquest If its illegal to download, then its the same to uppload. Then why have sites like Youtube? Which the news uses frequently

Panhinda@richardquest Knowledge should as far as possible have no boundaries. Archimedes didn't even wait to dress up before he began sharing

sepiahats@richardquest As long as no one's making money out of it,it really is our right to copy.Remember those self-made tapes from teenage days?

Lauratheexpat@richardquest I'll respect the law.But it would help if I didnt have 2 pay ridiculous prices to see a movie or buy a textbook!

carlmcdade@richardquest no more a double standard than speeding in your car but expecting swift justice for being hit by a speeder.

echom @richardquest of course it's questionable, but society and the law lag behind the development. there are no broadly acceptable rules, yet

core_APPLER@richardquest HYPOCRISY is a product of the Western World (not just w/downloading data)..Let me just give u 1 example: NUCLEAR PROLIFERATION

MichaelDCC@richardquest File sharing is stealing by sharing. Robin Hood was not a good guy he was a thief

Rikki_ND@richardquest I didn't as a teen, but as I've gotten a bit older I've come to see the issues arising from it so I buy what I download!



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