FinanceAdvanced

EBITDA

Earnings Before Interest, Taxes, Depreciation and Amortization

A measure of a company's core operating profit, before accounting effects like interest, tax and asset write-downs. It shows how the business does at its heart.

Example

Two companies with different loans and tax situations can be compared fairly using EBITDA.

Related terms

P&L

A summary of your income and expenses over a period that shows whether you made a profit or a loss. Also called the income statement.

Gross Margin

The share of each sale left over after the direct cost of making it — before overheads. Higher margins give you more room to grow.

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