EBITDA

What is EBITDA?

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company’s overall financial performance and is used as a proxy for the cash flow generated by its core operations.

Why It Matters

• It allows for easier comparison between companies with different capital structures or tax environments.

• Lenders often use EBITDA to determine a company’s ability to service its debt.

• It strips away non operating and non cash expenses to show the underlying profitability of the business.