While EBITDA is helpful in business analysis, it is not accepted by all. For example, Warren Buffet doesn't consider EBITDA an adequate measure of financial performance.nnOne of the most important things to note is that EBITDA is not a generally accepted accounting principle (GAAP). Companies must follow GAAP rules when releasing financial statements to their shareholders or external parties. Some companies do include EBITDA and adjusted EBITDA in their quarterly results. The Securities and Exchange Commission (SEC) requires companies reporting EBITDA to include how they arrived at their data.nnAnother common concern is the claim that EBITDA reports are sometimes deceptive and inflate a company's value. After all, capital expenditures are actual expenses. EBITDA can also obscure warning signs such as high debt levels, increasing costs, and a lack of profitability.nnFurthermore, EBITDA data is vulnerable to manipulation and can hide a company's actual ability to pay off debt. Companies can also alter depreciation schedules to make it look like they're more profitable than they really are.nnWhen used in good faith, EBITDA can help compare a business against other companies, macroeconomic trends, and industry averages. However, some companies can try to inflate their value. A potential warning sign is if a struggling company suddenly starts using EBITDA when it never has before.