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EBITDA , or Earnings before Interest, Taxes, Depreciation, and Amortization, is a different measure of profitability than net income. EBITDA , which includes depreciation and amortization as well as taxes and debt service expenses, seeks to depict the cash profit created by the company's activities. What does EBITDA mean ? The term stands for ‘earnings before interest, taxes, depreciation and amortisation’. EBITDA is one of the commonly used financial metrics to evaluate a company’s performance. It helps assess the company’s operating performance, which means that it only considers the operating costs to gauge its profitability, without the impact of nonoperating expenses like taxes and interest. EBITDA or Earnings before interest, taxes, depreciation, and amortization is a business valuation metric to assess the financial strength of the organization. Business owners utilize it to compare market performance with their rivals. Moreover, a positive or negative EBITDA explains the effect of the company’s capital structure on its cash flows and bottom line. It displays the financial results of a firm, except capital investments, like equipment, property, and plant. Please note that it ... EBITDA , or earnings before interest, taxes, depreciation, and amortization, measures a company’s operating profitability and is widely used to compare financial performance.
