Earnings Before Interest, Tax and Depreciation - EBITD

AAA

DEFINITION of 'Earnings Before Interest, Tax and Depreciation - EBITD'

An indicator of a company's financial performance, which is calculated as:

Earnings Before Interest, Tax and Depreciation (EBITD)

This measure attempts to gauge a firm's profitability before any legally required payments, such as taxes and interest on debt, are paid. Depreciation is removed because this is an expense the firm records, but does not necessarily have to pay in cash.

INVESTOPEDIA EXPLAINS 'Earnings Before Interest, Tax and Depreciation - EBITD'

EBITD is very similar to earnings before interest, taxes, depreciation and amortization (EBITDA), but excludes amortization.

The difference between amortization and depreciation is subtle, but worth noting. Depreciation relates to the expensing of the original cost of a tangible assets over its useful life, while amortization is the expense of an intangible asset's cost over its useful life. Intangible assets include, but are not limited to, goodwill and patents, and are unlikely to represent a large expense for most firms.

Using either the EBITD or EBITDA measures should yield similar results.

RELATED TERMS
  1. Earnings Before Interest & Tax ...

    An indicator of a company's profitability, calculated as revenue ...
  2. EBITA

    An acronym for "earnings before interest, taxes and amortization." ...
  3. Earnings Before Interest, Taxes, ...

    An indicator of a company's financial performance calculated ...
  4. Income Tax

    A tax that governments impose on financial income generated by ...
  5. Expense

    1. The economic costs that a business incurs through its operations ...
  6. Earnings Before Interest, Taxes, ...

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

    An Introduction To Depreciation

    Companies make choices and assumptions in calculating depreciation, and you need to know how these affect the bottom line.
  2. Insurance

    Everything Investors Need To Know About Earnings

    We go over the concepts behind the excitement over the most important figure in the stock market.
  3. Options & Futures

    EBITDA: Challenging The Calculation

    This measure has a bad rap, but it's still a valuable tool when used appropriately.
  4. Stock Analysis

    How Two Harbors' Derivatives Work?

    Mortgage REITs, like Two Harbors , have cut their dividend payments as interest rate trends have eaten into profitability under the business models.
  5. Stock Analysis

    What Has Been Delta Airlines Strategy To Soar?

    Airline stocks have soared over the past several years, and Delta Air Lines has been one of the leading airlines to reap the benefits. 
  6. Stock Analysis

    Does NVIDIA Have Revenue Opportunities With Tegra?

    Investors following NVIDIA know that one of the most buzzed-about parts of the company has been its Tegra mobile processors.
  7. Fundamental Analysis

    Efficiency Ratio

    There are many types of efficiency ratios, but all measure how well a company utilizes its resources to make a profit. Business managers use these ratios to determine how well they are operating ...
  8. Stock Analysis

    What’s The Best Airline Stock In the Industry?

    With many airlines forced to seek bankruptcy protection, Southwest Airlines stands out as having consistently remained profitable throughout its history.
  9. Stock Analysis

    Is 3D Systems Sell-Off A Buying Opportunity?

    It's not easy to find stocks that have sold off in the past year, but 3D Systems's shares have taken a nosedive in the beginning of 2014.
  10. Investing

    Deferred Tax Liability

    Deferred tax liability is a tax that has been assessed or is due for the current period, but has not yet been paid. The deferral arises because of timing differences between the accrual of the ...

You May Also Like

Hot Definitions
  1. Fixed-Charge Coverage Ratio

    A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated ...
  2. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  3. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  4. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  5. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  6. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
Trading Center