EBITDA

EBITDA means earnings before interest, taxes, depreciation, and amortization. In simple terms, EBITDA is a measure used to look at business profit before several accounting and financing costs. EBITDA is important because investors use it to compare operating performance across companies with different debt levels, tax situations, or asset structures. It is often used in valuation ratios like EV/EBITDA. For example, a company with high depreciation expenses may show lower net income but still have strong EBITDA. EBITDA is not the same as cash flow. It does not include all cash costs, capital expenditures, or changes in working capital.