EBITDA
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a financial metric that helps investors assess a company's cash flow from operations by excluding non-cash expenses such as interest, depreciation, amortization, and taxes. This allows for a clearer understanding of a company's operational profitability. EBITDA is often used as a valuation tool, as it gives a more accurate picture of a company's profitability without the influence of financial and accounting decisions. It is similar to operating income, also known as EBIT. Common ways to calculate EBITDA include: 1. EBITDA = Net Income + Taxes + Interest + Depreciation + Amortization. 2. EBITDA = Operating Income + Depreciation & Amortization
Related Terms
Equity Market
The equity market is where shares are traded, capital is raised, and stocks are offered,...
Long-Term Capital Gain Tax
Long-term capital gain tax is the tax levied on profits from the sale of shares...
Equity
Equity refers to ownership in a company, typically in the form of stocks or shares....
Direct Public Offerings
A Direct Public Offering (DPO) enables a company to sell shares directly to the public,...
Capital Gains
A capital gain is the profit earned when an investor or trader sells assets like...
Fair Value
Fair value is the mutually agreeable price for a stock, product, or service, ensuring neither...
