What is EBITDA?

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization.

EBITDA measures a company's earnings from its core operations, without taking into account non-operational expenses like taxes, interest, and depreciation. By focusing on the company's earnings from its main business activities, EBITDA provides a clearer picture of its profitability and ability to generate cash flow.

Business owners can use EBITDA to showcase their company's financial health to potential investors by demonstrating profitability and growth potential. EBITDA can also be used to compare the company's financial performance against competitors, making it a useful tool for identifying areas for improvement. This can help business owners make a compelling case for investment.