What is EBITDA?

Did you ever hear the word EBITDA on a conference call? Or see it on a quarterly report?

EBITDA = Earnings Before Interest Taxes Depreciation and Amortization

First, I must mention that EBITDA is a non-GAAP measure of profitability. EBITDA can make a company's disappointing earnings look not as bad or make great earnings look even more spectacular. EBITDA can also be used to compare a company to other companies within an industry.