Finance - Measure
EBITDA
(Earnings before interest, tax, depreciation and amortisation)
A measure of a company's profit before interest, tax and certain non-cash costs are taken off
What's it for?
Gives a simplified view of the profit generated by the business before financing, tax and the accounting cost of long-term assets.
For example…
A company reports £5 million of EBITDA to show its profit before interest, tax and certain accounting charges are taken off
Often confused with…
- EBIT (Earnings before interest and tax)A measure of a company's profit before interest costs and tax are taken off
- EBITA (Earnings before interest, tax and amortisation)A measure of profit before interest, tax and the accounting cost of certain non-physical assets are taken off
- EBITDAR (Earnings before interest, tax, depreciation, amortisation and rent)A measure of profit before interest, tax, certain accounting costs and rent are taken off