EBITDA

Pre-deduction profit measure

EBITDA is an accounting acronym for earnings before interest, taxes, depreciation, and amortization.

It measures a company's operating profitability without the effects of financing decisions, tax environments, or accounting choices about asset values.

Investors and analysts use it to compare companies across industries: Their EBITDA margin improved to 22%.

Critics note it can obscure actual cash flow and debt burdens.

components

revenue

Business income total

metric

normalized

Adjusted to standard measure

KPI · covenant

valuation

multiple

Consisting of many parts

  • acquisitionAct of obtaining something
  • buyoutPurchase of controlling interest
  • LBODebt-funded acquisition

bidding · M&A

adjustments

one-time

Occurring only once

synergies · extraordinary · non-operating · litigation · severance

criticism

misleading

Causing false beliefs

Categories
Opposites
financial metric completeness

EBITDAnet income

Profit after all deductions

net profit · bottom line · net earnings · earnings per share · free cash flow

operational vs. total obligations

EBITDAoperating loss

Negative operational income

debt service · capital expenditures · tax liability

Family

depreciation

Familiarity
Top 1,000,000
Profile
Used worldwide · Timeless · Abstract · Rated G