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. Energy Sector

    A category of stocks that relate to producing or supplying energy. ...
  5. Discovery Value Accounting

    A method of accounting often used in the oil and gas, mining ...
  6. Oil Price to Natural Gas Ratio

    A mathematical ratio comparing the prices of crude oil and natural ...
Related Articles
  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. Investing

    EBITDA: Challenging The Calculation

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

    What are Metrics?

    Metrics are tools that measure a company’s performance.
  7. 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.
  8. Markets

    Key Ratios For Analyzing Oil And Gas Stocks: Measuring Performance

    The number one measure of performance in oil and gas producers is core cash flow. This allows for increased certainty in meeting debt obligations (the oil industry generally carries larger levels ...
  9. Markets

    Do Oil and Natural Gas Prices Rise And Fall Together?

    Do the prices of crude oil and natural gas affect each other? Investopedia explores price patterns and provides analysis.
  10. Markets

    Key Ratios For Analyzing Oil And Gas Stocks: Introduction

    Oil and gas exploration and production (E&P) companies are unique from a valuation standpoint. Because of this, investors need to focus on a different subset of ratios to analyze the growth ...
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. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  2. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  3. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  4. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  5. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
  6. Enterprise Value (EV)

    A measure of a company's value, often used as an alternative to straightforward market capitalization. Enterprise value is ...
Trading Center