Definition
EBITDA is a measure of a company's profitability that excludes interest, taxes, depreciation, and amortization. It reflects the company�s ability to generate earnings from operations. EBITDA=EBIT+Depreciation+Amortization
Related Services
Financial analysis, corporate finance consulting, and investor relations services help assess EBITDA for performance comparisons and valuation.
Problem and Application
While EBITDA is widely used to compare companies' operational performance, it can overstate a company�s true profitability by excluding non-cash items like depreciation and amortization.
Conclusion
EBITDA is useful for comparing profitability but should be considered alongside other metrics like cash flow to evaluate a company�s true financial health.
