Definition:

1-year EBITDA per Share Growth Rate measures the percentage change in a company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) per share over a one-year period. It provides insight into how efficiently a company is growing its earnings relative to its number of shares outstanding.

Formula:

((EBITDA per Share at End of Year - EBITDA per Share at Start of Year) / EBITDA per Share at Start of Year) * 100

How to use the metric:

This metric is used by investors and analysts to assess a company's operational performance and growth potential. A higher growth rate indicates improving profitability and operational efficiency, which can be attractive to investors.

Limitations:

The metric does not account for changes in capital structure, tax rates, or non-operational income and expenses. It also does not consider the quality of earnings or potential one-time events that may have affected EBITDA.

Applies to:

This metric is particularly useful in industries where EBITDA is a key performance indicator, such as manufacturing, telecommunications, and utilities, where capital expenditures and depreciation can significantly impact net income.

Doesn't apply to:

Industries with significant intangible assets or where EBITDA is not a primary measure of performance, such as financial services or technology, may not find this metric as relevant. This is because these industries often focus on other metrics like net income or cash flow.

Summary:

The 1-year EBITDA per Share Growth Rate is a useful metric for evaluating a company's operational growth and efficiency over a short period. While it provides valuable insights, it should be used in conjunction with other financial metrics to get a comprehensive view of a company's performance.