Tag: EBITDA

EBITDA (/iːbɪtˈdɑː/, /əˈbɪtdɑː/,) or /ˈɛbɪtdɑː/ is an acronym for earnings before interest, taxes, depreciation, and amortization. It is a non-GAAP metric that is measured exactly as stated. All interest payments, tax, depreciation and amortization entries in the income statement are reversed out from the bottom-line net income. It purports to measure and allow to compare profitabilities of companies by canceling effects of different assets bases (by cancelling depreciation), different takeover histories (by cancelling amortization often stemming from goodwill), effects due to different tax structures as well as the effects of different capital structures (by cancelling interest payments)
The EBITDA of a company gives an indication on the operational profitability of the business, i.e. how much profit does it make with its present assets and its operations on the products it produces and sells, taking into account possible provisions that need to be done. Phrased differently: if…