In Astute BI Whole of Business reports, we report on both EBITDA (%) and EBITDARD (%). Both are useful metrics to know and understand.
EBITDA (%) (Earnings before interest, tax, depreciation and amortisation as a percentage of Total Venue Revenue.) is the metric used by financiers to calculate how much spare cash is available to service debt.
Financial institutions use EBITDA (%) in establishing the financial strength of an organisation, as it includes Rent and Donations.
EBITDARD (%) (Earnings before interest, tax, depreciation, amortisation, rent and donations as a percentage of Total Venue Revenue) has been created as the venue specific standard measure.
EBITDARD (%) is used to calculate Top 25%, Mid 50% and Top 25% in the Whole of Business as well as the Financial sections of the Benchmarking module. EBITDARD (%) also appears in a range of reports in these sections including a 13 month trend report (below).
Why Measure EBITDARD (%)?
The Astute BI system has been developed to enable effective comparison of ‘Core Licensed Venue’ activities. These activities are focused on the operation of Food, Beverage and Gaming activities and their associated operational overheads.
In order to compare different types of venue operations, such as Leagues, RSL, Bowling and Golf, the income and expenditure associated with ‘Non-Core Licensed’ activities, such as football, bowling greens and golf courses, have been omitted. Other ‘Business Diversification’ pursuits, such as Gyms, Accommodation, and rental properties are also omitted.
If we consider that a Venue Certificate of Registration is a license given to champion a community cause such as recreational facilities (e.g. Bowling, Football, Golf, Returned Services Support etc.), then the ‘Core Licensed Venue’ activities are the financial engine that allows for those other activities to take place. Astute BI, through the benchmarking reports, provides a direct comparison of these operational activities.
In order to provide a more accurate measure, venue operational efficiency is best standardised using a slight variation on the traditional company measurement, EBITDA (%) by adding Rent and Donations. Rent encompasses the emerging trend of ‘Off Balance Sheet’ rental of IT and Gaming Equipment while Donations is self-explanatory.