In business language, EBITDA has become a benchmark. Bankers, investors, and buyers use it to compare, value, and assess the performance of a company.

But be careful: limiting yourself to EBITDA can give a falsely reassuring picture. Behind a nice number, there may be structural weaknesses that do not appear in the income statement.

And in the context of a transfer (sale, inheritance) or a strategic assessment, these vulnerabilities always end up surfacing.

What EBITDA does not tell

The investment needed to keep the machine running

A company may show a good EBITDA, but if it has to regularly replace expensive machinery or invest heavily in its IT, the actual cash flow is much lower.

Working capital requirement

A growing company often needs to finance more inventory, more accounts receivable, sometimes long before getting paid. EBITDA is positive, but cash is running low.

The dependence on a few key people

In many family-owned SMEs, the founder or a small group holds the customer relationship or critical know-how. EBITDA does not indicate whether this dependence weakens the transfer.

The pressure on the teams

Some leaders "pull" on their teams to achieve short-term results. The numbers look good, but at the cost of a deteriorated social climate, high turnover, or a lack of engagement.

The quality of revenue

A company can inflate its EBITDA by increasing volumes or cutting costs, but with low customer margins, significant discounts, or excessive dependence on 1 or 2 large clients.

The costs we prefer to forget

In a divestiture, EBITDA is often adjusted ("normalization adjustments") to remove exceptional costs. However, these adjustments sometimes mask recurring realities: IT costs, overhead expenses, energy...

Concrete examples

• In Belgium, several transfers of family SMEs have proven to be more complicated than expected: a flattering EBITDA did not compensate for the dependence on the founders, who, once gone, left a void in the customer relationship.
• In the industrial sector, some companies show a good EBITDA but consume a lot of cash to finance their inventory and machinery. A buyer quickly discovers that the reported "profitability" does not translate into available cash.
• In B2B services, we often encounter heroic sales teams that hold growth up by their fingertips. The day one or two key people leave, performance drops sharply, even though past EBITDA seemed solid.

The real question is not just: "How much does the company earn today?", but rather "Is its performance sustainable and transferable tomorrow?".

This implies looking at:

• The robustness of the organization and governance,
• The commitment and stability of teams,
• The dependence on clients or key individuals,
• The actual conversion of EBITDA to cash,
• The potential for sustainable improvement, beyond accounting adjustments.

Our belief at SAYGODO

At SAYGODO, we see EBITDA as a starting point, never an end in itself.

We help leaders of SMEs and family businesses to :

• Identify what EBITDA hides,
• Strengthen the operational and human resilience of their company,
• Building a performance that is passed on and lasts, beyond the numbers.

Because at the time of a sale, an inheritance, or simply to secure the future, the value of a business is not measured solely in an Excel spreadsheet: it relies on the sustainability of its model and the commitment of its teams..

And you, in your company: does your EBITDA really reflect sustainable performance... or does it still hide blind spots? ?