Skip to main content

EBITDA

What is EBITDA?

Earnings before interest, taxes, depreciation and amortization (EBITDA) is a measure of a company's operating performance. It indicates earnings from core business operations, excluding the effects of capital structure, tax rates and non-cash accounting items. EBITDA is often used to compare profitability across companies and industries.

Investors and analysts use EBITDA to assess a company's performance and compare it with peers, as it eliminates factors that can vary widely between companies. However, EBITDA should be considered alongside other financial metrics for a comprehensive analysis.

Related terms

30-Day and 13-Week Operating Cash Burn
30-day and 13-week operating cash burn are also known as the “burn rate.” These are the rates at which a business consumes its cash reserves when it isn’t bringing in profit. 
Accounts Payable Days
Accounts Payable Days (AP Days), also referred to as Days Payable Outstanding (DPO), is a financial ratio that measures the average time a company takes to pay its suppliers or vendors for credit purchases.
Accounts Payable Turnover
Accounts payable turnover explains how many times a business pays its creditors in a set timespan. Companies can use this metric to measure their short-term liquidity.
Accounts Receivable Turnover
The accounts receivable turnover ratio (or debtor turnover ratio) allows businesses to evaluate their debt collection efficiency.
Advanced Reporting
Advanced reporting refers to a sophisticated approach to generating and analyzing reports using advanced tools, techniques, and technologies.
Annual Recurring Revenue (ARR)
Annual Recurring Revenue (ARR) is a key metric used by subscription-based businesses to track and measure their predictable, recurring revenue streams over a one-year period.