Earnings before interest, taxes, depreciation and amortization

Uncommon card · No. 84622

Earnings before interest, taxes, depreciation, and amortization, commonly known as EBITDA ( EE-bit-dah, EB-it-dah), is a measure of a company's profitability of the operating business only, before any effects of indebtedness, state-mandated payments, and costs required to maintain its asset base. It is derived by subtracting from revenues all costs of the operating business (e.g., wages, costs of raw materials, and services) but not decline in asset value, cost of borrowing and obligations to governments. Although certain leases have been capitalized on the balance sheet (and depreciated in the profit and loss statement) since IFRS 16, its expenses are often still adjusted back into EBITDA given they are deemed operational in nature. Though often shown on an income statement, it is not considered part of the Generally Accepted Accounting Principles (GAAP) by the SEC, hence in the United States the SEC requires that companies registering securities with it (and when filing its periodic...

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