Ebitda: MoneyWeek Glossary

Ebitda – Earnings before interest, tax, depreciation and amortisation, takes operating profit and adds back two subjective costs: depreciation and amortisation.

If you read the business pages for any length of time, you’re likely to come across a rather clunky acronym: Ebitda. What does it mean, and why does anyone use it?

Ebitda is a way of measuring profit that can make it easier to compare the valuation of two companies. The acronym stands for earnings before interest, tax, depreciation and amortisation.

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