EBITDA Meaning

Earnings before interest, tax, depreciation and amortization. This is the same as EBDIT or EBITD except it also includes amortization.

International companies do not always publish amortization figures but when they do, this is the best measure to use for evaluating a company’s core business rather than EBDIT.

Amortization also is one of those items that differs from country to country in how it is treated and by adding it back to EBDIT, it removes all potential distortions from this measure of operating income.

EBITDA is often used by analysts to measure the cash flow or underlying cash generating capability of a company.

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