“Second, EBITDA does not account for the company’s reinvestments in operating assets. So, EBITDA overstates the funds available to stockholders if reinvestment needs exceed depreciation charges.” I am not seeing that, I tried to reason and I tried math… I am thinking EBITDA overstates the funds available to stockholders regardless of whether reinvestment needs exceed or do not exceed depreciation. FCFE=(EBITDA-I)(1-t)+depr(t)-wc-fc+net new debt assume I=new debt=t=0 FCFE=(ebita)-wc-fc thus ebita overestimated the cash flows to equity regardless of the depreciation offcourse this is a simplication, but you can create others cases where i, new debt, t are not 0 and still get overestimate out of ebitda