What is 'Earnings Before Interest, Taxes, Depreciation, Depletion, Amortization and Exploration Expenses - EBITDAX'

Earnings before interest, taxes, depreciation, depletion, amortization and exploration expenses (EBITDAX) is an indicator of a company's financial performance calculated as:

= Revenue - Expenses (excluding tax, interest, depreciation, depletion, amortization and exploration expenses)

BREAKING DOWN 'Earnings Before Interest, Taxes, Depreciation, Depletion, Amortization and Exploration Expenses - EBITDAX'

EBITDAX is used when reporting earnings for oil and mineral exploration companies. It excludes costly exploration expenses and gives the true EBITDA of the firm.

This is especially useful when a company wants to acquire another company. The EBITDAX would cover any loan payments needed to finance the takeover.

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