Thursday, January 26, 2006

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.


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