Earnings Before Interest, Depreciation, Amortization and Exploration - EBIDAX

DEFINITION of 'Earnings Before Interest, Depreciation, Amortization and Exploration - EBIDAX'

An earnings metric used in the evaluation of oil, gas and mineral firms. The metric is used in a similar manner to the way that EBITDA is used for other firms, and allows investors and other stakeholders to get a better idea of the true earnings-generating capacity of the firm without the obscuring the effects of accounting rules.

BREAKING DOWN 'Earnings Before Interest, Depreciation, Amortization and Exploration - EBIDAX'

EBIDAX is one of several earnings metrics that may be employed by analysts to evaluate the financial strength of an oil, gas or mineral firm. Exploration costs are excluded because there are different methods than can be used to account for exploration costs in oil and gas accounting. Excluding these costs allows for a more accurate comparison to the firm's competitors, who may use different accounting methods.

RELATED TERMS
  1. Metrics

    A wide variety of tools that managers and executives can use ...
  2. Soft Metrics

    A slang term for intangible indicators used to value a startup ...
  3. EBITDA - Earnings Before Interest, ...

    Learn what EBITDA is, watch a short video to learn more and with ...
  4. EBITDA to sales ratio

    A financial metric used to assess a company's profitability by ...
  5. Integrated Oil & Gas Company

    A business entity that engages in the exploration, production, ...
  6. Energy Sector

    A category of stocks that relate to producing or supplying energy. ...
Related Articles
  1. Markets

    5 Common Trading Multiples Used In Oil And Gas Valuation

    Before you decide to invest in oil and gas, you should understand these multiples.
  2. Managing Wealth

    5 Reasons Why Private Equity Investors Like Oil and Gas Companies

    Oil and gas companies may look like a risky industry on the outside, but private equity investors have found reasons to regularly invest in these firms.
  3. ETFs & Mutual Funds

    XOP: SPDR S&P Oil & Gas ETF

    Discover the investment strategy behind SPDR S&P Oil & Gas Exploration and Production ETF, and learn what type of investor may find it suitable.
  4. Investing

    Free Cash Flow vs EBITDA: Which Should You Analyze?

    FCF and EBITDA are two ways of looking at the earnings of a business. EBITDA might be better for comparison purposes, while FCF is good for valuation.
  5. Markets

    4 Leverage Ratios Used In Evaluating Energy Firms

    These four leverage ratios can help investors understand how oil and gas firms are managing their debt.
  6. Markets

    Accounting For Differences In Oil And Gas Accounting

    How a company accounts for its expenses affects how its net income and cash flow numbers are reported.
  7. Investing

    EBITDA: Challenging The Calculation

    This measure has a bad rap, but it's still a valuable tool when used appropriately.
  8. Investing

    What are Metrics?

    Metrics are tools that measure a company’s performance.
  9. Investing

    A Clear Look At EBITDA

    This measure has its benefits, but it can also present earnings through rose-colored glasses.
  10. Markets

    Do Natural Gas Prices Always Follow Oil Trends?

    Prices for oil and natural gas are highly correlated. But investors should be aware of different factors affecting the prices of these commodities.
RELATED FAQS
  1. Why is EBITDA commonly used as a valuation metric for telecommunications companies?

    Examine the nature of the telecommunications sector, and learn why it makes EBITDA a good equity valuation metric for telecom ... Read Answer >>
  2. What metrics can be used to evaluate companies in the oil and gas sector?

    Learn how to analyze oil and gas sector companies using the same metrics and analytical techniques as professional investment ... Read Answer >>
  3. What is the formula for calculating EBITDA?

    Learn about EBITDA and how companies can manipulate this calculation to look more profitable. Read Answer >>
  4. What are the main benchmarks that track the oil & gas drilling sector?

    Read about several different types of benchmarks that investors can use to track the overall performance of the oil and gas ... Read Answer >>
  5. What percentage of the global economy is comprised of the oil & gas drilling sector?

    Read about a rising industry that already composes as much as one-twentieth of total global economic output: the oil & gas ... Read Answer >>
  6. What average annual return does the oil and gas sector generate for an investor?

    Learn about the average annual return for the oil and gas sector and how it compares to the average annual returns for the ... Read Answer >>
Hot Definitions
  1. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  2. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  3. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  4. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  5. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
  6. Weighted Average Life - WAL

    The average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding. Once calculated, ...
Trading Center