EBITDA is a financial metric that provides a snapshot of a company's profitability by calculating its earnings before non-operating expenses and non-cash charges. It is often used to measure the profitability of companies that have significant depreciation and amortisation expenses, such as those in the manufacturing or technology sectors.
EBITDA is calculated by adding a company's earnings before interest and tax (EBIT) to its depreciation and amortization expenses. This metric is useful because it provides a clearer picture of a company's cash flow and operating performance than other metrics that include non-cash expenses.
EBITDA is not recognised under generally accepted accounting principles (GAAP) and should not be used as the sole measure of a company's financial health. It is important to consider other financial metrics and ratios, such as net income, earnings per share, and price-to-earnings ratio, when evaluating a company's financial performance.
It is important to note that EBITDA is different from EBIT, which only takes into account a company's earnings before interest and taxes. EBITDA provides a more accurate picture of a company's operating performance than EBIT because it includes non-cash expenses that can impact a company's cash flow. However, it is important to note that EBITDA does not reflect the actual cash flow of a company and should be used in conjunction with other financial metrics.
Full company financial data and account filings are available through FullCircl's Customer Lifecycle Intelligence platform, including EBITDA. Visit https://fullcircl.com to find out more.