Do software developers need to know EBIDTA?

Historical financial statement
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Definition of EBIDTAEarnings Before Interest, Taxes, Depreciation and Amortization

Words that one usually sees in financial reports of every organization. These are usually used by sales team when they talk to customers or by Managers and Senior Management while discussing the profitability of their groups. Other than those with financial background, it is very highly unlikely that one talks about EBIDTA in one’s daily lives.

So, the question that comes to my mind is – Do developers need to know about EBIDTA of their organization? Is it required?

The question does not have a simple answer. The first response that comes to my mind is “NO”. Why should they be worried? They should be more worried about the software they are developing for their customer. That should be their primary focus at work – no distractions from the responsibility they were hired for. They are not paid to worry about the EBIDTA and improve it.

But, on thinking further, there is a need for everyone in the organization (either developer or Manager) to be aware of the financial health of their organization. The developers may not do anything to change the numbers but this number will give an idea of how they are faring in the industry and is usually a parameter to compare with their peers.

My suggestion if one asks is – Take Notice but dont lose sleep over these statements unless you are in a position to impact it directly.

What do you think? Is it essential in today’s date and age?

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One Response to “Do software developers need to know EBIDTA?”

  1. Prateek Says:

    Very thought provocative post.
    I support the second opinion…In my opinion, everyone on-board should be well informed about every minute aspect of the organization that he/she works for, be it financial,social, future goals, attrition or hiring. This is the digital age, the time of Gen Y – the leadership works in inverted pyramid and not from top to bottom. The only exception, which is mostly the case, is with those who are shy or scared of their shortcomings being exposed and hence stay content with their coding world a.k.a. technical expertize – in the case of Software Developers – they have short term goals in life, say, doing ONLY what they are paid for (in general).

    Loosing sleep or not depends on one’s passion for knowledge, inclination towards various aspects of life. This indeed is directly proportional to individual’s resiliency power, experiences in life and his/her mentor’s advice.

    I think young generation (and hence the average Software Developer) is getting more and more aware and wants to take control of his life himself. This, to me, is progress !

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