Earnings Before Interest and Taxes, Depreciation, and Amortization (EBITDA)
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is a measure of a company`s overall financial performance and is used as an alternative to net income in some circumstances.
Benefits
EBITDA gives a clear picture of earnings. It shows profit from just the business`s operations. This helps in comparing companies without the noise of tax and other costs.
Frequently Asked Questions
What is earnings after interest taxes depreciation and amortization?
This is not a standard term. EBITDA is about earnings before paying these costs, not after.
How to calculate earnings before depreciation and amortization?
To find EBITDA, add back Interest, Taxes, Depreciation, and Amortization to Net Income. The formula is: EBITDA = Net Income + Interest + Taxes + Depreciation + Amortization.
What is the full form of EBITDA?
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization.
Key Takeaway
EBITDA is a useful tool to see how a business really does. It helps ignore things like taxes that can hide the true picture.