Why Can EBITDA Improve While Cash Flow Gets Worse in Manufacturing?
Direct Answer Yes, EBITDA can improve while cash flow deteriorates in manufacturing companies. This typically occurs when inventory, accounts receivable, or working capital requirements grow faster than cash generation. In these situations, reported profitability may improve while liquidity weakens. For commercial bankers, this distinction is critical because loans are repaid with cash flow, not EBITDA. […]