DEFINITION of 'Earnings Before Interest, Tax, Amortization And Exceptional Items - EBITAE'

An accounting metric often used to deduct the amortization of intangible assets to arrive at a value. Companies will use EBITAE not only as a measure of performance, but also to determine interest coverage capabilities. The eliminated items are often seen as factors that distort earnings that are derived from the underlying business operations of a firm.

Calculated as:

Earnings Before Interest, Tax, Amortization And Exceptional Items (EBITAE)

Where expenses* represents expenses that exclude interest, taxes, amortization of intangible assets and exceptional items.

BREAKING DOWN 'Earnings Before Interest, Tax, Amortization And Exceptional Items - EBITAE'

When evaluating EBITAE, investors will look at the figure as a percentage of revenue and they will also measure EBITAE margin. Both the percentage and margin will be compared to previous years' figures to evaluate performance. This ratio is very similar to the EBITDA, a very popular performance measure often used by investors.

RELATED TERMS
  1. EBITA

    Earnings before interest, taxes and amortization. To calculate ...
  2. Amortization Of Intangibles

    A tax term relating to the practice of deducting the cost of ...
  3. Amortization

    1. The paying off of debt in regular installments over a period ...
  4. Amortized Bond

    A financial certificate that has been reduced in value for records ...
  5. Earnings Before Interest, Taxes, ...

    A measure of a company's financial performance that looks at ...
  6. Earnings Before Interest, Tax and ...

    An indicator of a company's financial performance, which is calculated ...
Related Articles
  1. Investing

    What is EBITA?

    EBITA measures a company’s full profitability before reducing it by interest, taxes and amortization considerations, and so is useful for calculating a company’s internal efficiency or profitability ...
  2. Investing

    EBITA: Word on the Street

    Ben Willis of Princeton Securities tells Cheddar why EBITA is today's Word on the Street.
  3. Investing

    Explaining Amortization In The Balance Sheet

    Amortization is important to account for intangible assets. Read to find out more about amortization.
  4. Investing

    Explaining Amortization In The Balance Sheet

    Amortization occurs when an asset’s value decreases over time, usually over its estimated useful life.
  5. Investing

    EBITDA

    Otherwise known as Earnings Before Interest, Taxes, Depreciation and Amortization. Learn more about this indicator of a company's financial performance.
  6. Investing

    Intangible Assets Provide Real Value To Stocks

    Intangible assets don't appear on balance sheets, but they're crucial to judging a company's value.
  7. Personal Finance

    Mortgage Amortization Strategies

    Should you get a 30-year mortgage? A 15-year one? Ways to decide which mortgage is the best fit.
  8. Investing

    A Clear Look At EBITDA

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

    EBITDA: Challenging The Calculation

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

    Amortization

    Amortization and depreciation are two ways to prorate the cost of an asset's life. Learn more about the former and how it it's calculated.
RELATED FAQS
  1. What are the differences between amortization and impairment?

    Learn the differences between amortization and impairment as they relate to intangible assets held on a company's balance ... Read Answer >>
  2. How does one amortize intangible assets?

    Understand what distinguishes intangible assets and how companies are required to amortize their value over time to recover ... Read Answer >>
  3. Where do traders place orders when they identify ascending triangles?

    Learn which businesses are required to depreciate or amortize capital expenses, or CAPEX, and which businesses are eligible ... Read Answer >>
  4. Over what sort of time span should I be examining a company's EBITA margin?

    Discover the time frame for evaluating the EBITDA margin of a company, and learn why it is an important profit margin for ... Read Answer >>
  5. How do intangible assets appear on a balance sheet?

    Understand how various types of intangible assets are handled in a company's accounting and which of them you can find on ... Read Answer >>
  6. What is the difference between operating margin and EBITDA

    Understand the key differences between, and purposes of, two measures of profitability that companies use: operating profit ... Read Answer >>
Hot Definitions
  1. Quadruple Witching

    The expiration date of various stock index futures, stock index options, stock options and single stock futures. All stock ...
  2. Co-pay

    A type of insurance policy where the insured pays a specified amount of out-of-pocket expenses for health-care services such ...
  3. Protectionism

    Government actions and policies that restrict or restrain international trade, often done with the intent of protecting local ...
  4. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  5. Demonetization

    Demonetization is the act of stripping a currency unit of its status as legal tender and is necessary whenever there is a ...
  6. Investment

    An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic ...
Trading Center