IDEAS home Printed from
   My bibliography  Save this article

EBITDA margin in brazilian companies. Variance decomposition and hierarchical effects


  • Alcalde Adriano

    () (University of Sao Paulo)

  • Lopes Fávero Luiz Paulo

    () (University of Sao Paulo)

  • Turola Takamatsu Renata

    () (University of Sao Paulo)


This study explores the controversy between the business and academic perspectives regarding earnings before interest, taxes, depreciation, and amortization (EBITDA). Some authors argue that EBITDA is not useful as an indicator, except for comparing companies within the same sector (Assaf Neto, 2003, McClure, 2006, Stumpp, 2000). On the other hand, the business world strongly uses this type of indicator as a tool to support its decisions (Schmalensee, 1985, Moraes, 2005). This difference in opinions has aroused interest in understanding the reasons for its use and has raised questions regarding the usefulness of EBITDA for comparing companies from both the same and different sectors. By applying Hierarchical Linear Modeling (HLM), the main goal of this research is to observe EBITDA behavior across companies selling goods in Brazil, comparing them within the same sector and across different sectors over time. This research allows for the analysis of the reasons why EBITDA patterns occasinally occur. The results show significant variation in EBITDA among companies across the same sector and across companies from different sectors. On the other hand, our results have shown, nevertheless, that the variability among companies from the same sector was the highest one, raising questions on the actual usefulness of this indicator to compare companies from the same sector.

Suggested Citation

  • Alcalde Adriano & Lopes Fávero Luiz Paulo & Turola Takamatsu Renata, 2013. "EBITDA margin in brazilian companies. Variance decomposition and hierarchical effects," Contaduría y Administración, Accounting and Management, vol. 58(2), pages 197-220, abril-jun.
  • Handle: RePEc:nax:conyad:v:58:y:2013:i:2:p:197-220

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Dong, Minyue & Stettler, Alfred, 2011. "Estimating firm-level and country-level effects in cross-sectional analyses: An application of hierarchical modeling in corporate disclosure studies," The International Journal of Accounting, Elsevier, vol. 46(3), pages 271-303, September.
    Full references (including those not matched with items on IDEAS)

    More about this item


    EBITDA; hierarchical effects; Brazil;


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nax:conyad:v:58:y:2013:i:2:p:197-220. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alberto García-Narvaez (Technical Editor)). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.