What is EBITDA?

Why is it important?

1/ What does it stand for?

EBITDA is an acronym that stands for:

Earnings
Before
Interest
Taxes
Depreciation
Amortization

2/ Not a GAAP measure

EBITDA is not a number that you will typically see on a company’s financial statements

It’s a measure that companies calculate separately in a 10K filing or one that you could calculate yourself

3/ What does it mean?

You probably have a good idea of what “Profit” is

Profit is what is left over after deducing expenses from a
company’s revenue

EBITDA is an adjusted measure of profit

You can calculate it as follows:

1) Start with Net Profit

2) Add: Interest, Taxes, Depreciation, Amortization

3) The result is EBITDA