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

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.

RELATED TERMS
  1. Depletion

    An accrual accounting method that companies use to allocate the ...
  2. Depreciation, Depletion and Amortization ...

    A method of accounting associated with the acquisition, exploration ...
  3. Earnings Before Interest, Tax and ...

    An indicator of a company's financial performance, which is calculated ...
  4. Amortization

    1. The paying off of debt in regular installments over a period ...
  5. Earnings Before Interest, Depreciation ...

    A measure of the earnings of a company that adds the interest ...
  6. Earnings Before Interest, Taxes, ...

    A measure of a company's financial performance that looks at ...
Related Articles
  1. Investing

    EBITDA

    Otherwise known as Earnings Before Interest, Taxes, Depreciation and Amortization. Learn more about this indicator of a company's financial performance.
  2. 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.
  3. Investing

    Depreciation

    Amortization and depreciation are two ways to prorate the cost of an asset's life. Learn more about the latter and how it it's calculated.
  4. Investing

    5 Common Trading Multiples Used In Oil And Gas Valuation

    Before you decide to invest in oil and gas, you should understand these multiples.
  5. Economics

    Explaining Amortization In The Balance Sheet

    Amortization occurs when an asset’s value decreases over time, usually over its estimated useful life.
  6. Credit & Loans

    Mortgage Amortization Strategies

    Should you get a 30-year mortgage? A 15-year one? Ways to decide which mortgage is the best fit.
  7. 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.
  8. Economics

    Should You Ignore EBITDA?

    EBITDA may get a bad rap in the financial world, but it can actually help investors create an apples-to-apples comparison.
  9. Credit & Loans

    Calculating Interest Expense

    Interest expense is the cost of borrowing money.
  10. Fundamental Analysis

    Explaining Capitalized Cost

    A capitalized cost is an expense associated with a fixed asset that is added to the basis of that asset and expensed over its depreciable life.
RELATED FAQS
  1. Does gross profit include depreciation or amortization?

    Understand the distinction between depreciation and amortization, and learn under which circumstances either type of expense ... Read Answer >>
  2. What is the tax impact of calculating depreciation?

    Understand the tax implications of a company's depreciation. Learn how differences in accounting methods change the amount ... 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 is the difference between amortization and depreciation?

    Because very few assets last forever, one of the main principles of accrual accounting requires that an asset's cost be proportionally ... Read Answer >>
  5. How do I calculate an EBITDA margin using Excel?

    Learn about the EBITDA profit margin and how to use Microsoft Excel to calculate this profitability metric using data from ... Read Answer >>
  6. What is the relationship between accumulated depreciation and depreciation expense?

    Understand the relationship between accumulated depreciation and depreciation expense. Learn how each one is accounted for ... Read Answer >>
Hot Definitions
  1. Physical Capital

    Physical capital is one of the three main factors of production in economic theory. It consists of manmade goods that assist ...
  2. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  3. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  4. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  5. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
Trading Center