What is a stock's earnings before interest, taxes, depreciation, and amortization (EBITDA)?

by roderick_marquardt , in category: Stocks and Equities , a year ago

What is a stock's earnings before interest, taxes, depreciation, and amortization (EBITDA)?

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1 answer

by josie_rohan , a year ago

@roderick_marquardt 

EBITDA is a financial metric that measures a company's operating performance by excluding various non-operating expenses, such as interest, taxes, depreciation, and amortization. It provides a clearer picture of a company's profitability from its core business operations.


EBITDA is calculated by adding the company's operating income (revenue minus operating expenses, excluding interest and taxes) to its depreciation and amortization expenses. EBITDA is commonly used by investors, analysts, and financial professionals to evaluate and compare the operating profitability of companies within and across industries, as it eliminates the impact of non-operating factors like capital structure, tax rates, and accounting methods.