Summary
EBITDA means Earnings Before Interest, Taxes, Depreciation, and Amortisation. It measures earnings before financing, taxation, and certain non-cash accounting expenses.
Why it matters
EBITDA can help investors compare companies with different financing structures, tax positions, or depreciation policies. It is also commonly used in valuation and leverage analysis.
How to read it
Higher or improving EBITDA may indicate stronger operating earnings. Declining EBITDA may suggest weaker performance or rising costs.
EBITDA is not the same as cash flow because it does not account for capital expenditure or movements in working capital.