EBITDA

Earnings before interest, tax, depreciation and amortisation - EBITDA - is one of the most widely used measures of profitability used by analysts, lenders and investors to calculate and compare companies’ core operating earnings. EBIT excludes tax and interest expenses; EBITDA further excludes depreciation and amortisation expenses. EBITDA offers a cleaner picture of earnings than EBIT alone as companies may have varying depreciation and amortisation policies. For institutional and bank lenders, EBITDA is the basis for an array of ratios to assess how leveraged companies are and the basis on which they represent bankable risk.

logo-animationlogo-animationlogo-animation

Related terms