What is EBITDA?

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's profitability that excludes certain non-cash expenses, such as depreciation and amortization, as well as interest and taxes.

EBITDA is often used as a measure of a company's financial performance because it provides a more accurate picture of the company's operating results, as it excludes non-cash expenses and financing costs that can distort the picture provided by other measures, such as net income.

EBITDA is calculated by taking a company's net income and adding back interest, taxes, depreciation, and amortization. It is typically expressed as a dollar amount or as a percentage of revenue.

EBITDA is widely used in the finance industry, particularly in the context of valuing companies and evaluating investment opportunities.