Earnings Before Interest, Taxes, Depreciation and Amortization - EBITDA
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Definition of 'Earnings Before Interest, Taxes, Depreciation and Amortization - EBITDA'
An indicator of a company's financial performance which is calculated in the following EBITDA calculation:
EBITDA is essentially net income with interest, taxes, depreciation, and amortization added back to it, and can be used to analyze and compare profitability between companies and industries because it eliminates the effects of financing and accounting decisions.
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Investopedia explains 'Earnings Before Interest, Taxes, Depreciation and Amortization - EBITDA'
This is a non-GAAP measure that allows a greater amount of discretion as to what is (and is not) included in the calculation. This also means that companies often change the items included in their EBITDA calculation from one reporting period to the next.
EBITDA first came into common use with leveraged buyouts in the 1980s, when it was used to indicate the ability of a company to service debt. As time passed, it became popular in industries with expensive assets that had to be written down over long periods of time. EBITDA is now commonly quoted by many companies, especially in the tech sector - even when it isn't warranted.
A common misconception is that EBITDA represents cash earnings. EBITDA is a good metric to evaluate profitability, but not cash flow. EBITDA also leaves out the cash required to fund working capital and the replacement of old equipment, which can be significant. Consequently, EBITDA is often used as an accounting gimmick to dress up a company's earnings. When using this metric, it's key that investors also focus on other performance measures to make sure the company is not trying to hide something with EBITDA.
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Search results for 'Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)'
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http://www.investopedia.com/ask/answers/09/ebitda-ebitdar-ebitdarm.asp
... EBITDAR, or earnings before interest, taxes, depreciation, amortization and
rent/restructuring costs, is the same calculation as EBITDA, with the exception ...
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http://www.investopedia.com/articles/06/ebitda.asp
... quarterly reports and accounts: earnings before interest, taxes, depreciation and
amortization (EBITDA ... The earnings, tax and interest figures are found on ...
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http://www.investopedia.com/articles/analyst/020602.asp
... EBITDA, an acronym for "earnings before interest, taxes, depreciation and
amortization," is an often-used measure of the value of a business. ...
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http://www.investopedia.com/articles/basics/11/common-multiples-used-in-oil-and-gas-valuation.asp
... or the earnings before interest, taxes, depreciation and amortization (EBITDA) multiple,
this is often used to determine the value of an oil and gas company. ...
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http://www.investopedia.com/articles/fundamental-analysis/08/enterprise-multiple.asp
... such as price to earnings (P/E), price to book (P/B), enterprise value (EV), earnings
before interest, taxes, depreciation and amortization (EBITDA) or the ...
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http://www.investopedia.com/university/ratios/investment-valuation/ratio8.asp
... The data for Zimmer Holdings' enterprise value and earnings before interest, taxes,
depreciation and amortization (EBITDA) were obtained from its stock quote ...
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http://www.investopedia.com/exam-guide/series-65/quantitative-methods/income-statement-key-calculations.asp
... Another EBIT measure is EBITDA, which is Earnings Before Interest, Taxes, Depreciation
and Amortization. EBITDA can be used to analyze the profitability ...
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http://www.investopedia.com/articles/stocks/09/screening-stocks-for-investing.asp
... earnings (P/E), price-to-sales (P/S), price-to-book (P/B) and enterprise value to
earnings before interest, taxes, depreciation and amortization (EV/EBITDA). ...
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http://www.investopedia.com/university/financialstatements/financialstatements4.asp
... 3. Income From Continuing Operations Before Taxes (Pre-Tax Earnings)
Pre-tax earnings subtracts (includes) interest expense. ...
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http://stocks.investopedia.com/stock-analysis/2011/Winn-Dixie-Drives-Sales-Now-Time-For-Profits-WINN-KR-SVU-SWY1102.aspx
... The company's adjusted earnings before interest, taxes, depreciation and amortization
(EBITDA) for the quarter was $7.4 million versus a loss in year ago period ...
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