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EBITDA

Earnings before interest, taxes, depreciation, and amortization - core profitability.

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) measures a company's operating profitability independent of financing, accounting, and tax decisions. It's widely used for valuation and comparing company performance.

Formula

EBITDA = Net Income + Interest + Taxes + Depreciation + Amortization

Tips

  • EBITDA shows operational efficiency
  • Positive EBITDA is key milestone
  • Used in valuation multiples

Related Terms

GROSS MARGINBURN RATEREVENUEVALUATIONUNIT ECONOMICS

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