Operating Income Before Depreciation And Amortization - OIBDA

AAA

DEFINITION of 'Operating Income Before Depreciation And Amortization - OIBDA'

A non-GAAP measure of financial performance used by companies to show profitability in continuing business activities, excluding the effects of capitalization and tax structure.

Sometimes OIBDA is also considered to not include items such as changes in accounting principles that are not indicative of core operating results, income from discontinued operations and the earnings/losses of subsidiaries.

Calculated as:

Operating Income Before Depreciation And Amortization (OIBDA)

INVESTOPEDIA EXPLAINS 'Operating Income Before Depreciation And Amortization - OIBDA'

This measure is gaining ground as companies move away from using earnings before interest, taxes, depreciation and amortization (EBITDA). These two measures are similar except in terms of the income numbers they use. In OIBDA, the calculation is started with GAAP net operating income. In EBITDA, the calculation is started with GAAP net income.

Unlike EBITDA, OIBDA does not incorporate non-operating income. This is seen as an advantage for comparison purposes because non-operating income usually doesn't reoccur year after year and its separation from operating income ensures that all income reflects only the income earned from regular operations.

RELATED TERMS
  1. Amortization

    1. The paying off of debt in regular installments over a period ...
  2. Depreciation

    1. A method of allocating the cost of a tangible asset over its ...
  3. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
  4. Earnings Before Interest, Taxes, ...

    An indicator of a company's financial performance which is calculated ...
  5. Operating Income

    The amount of profit realized from a business's operations after ...
  6. Earnings

    The amount of profit that a company produces during a specific ...
RELATED FAQS
  1. As an investor in stock, how should I evaluate a company's capital employed?

    Before you evaluate a company's capital employed, you first need to nail down a consistent, working definition of capital ... Read Full Answer >>
  2. Why might two companies calculate capital employed differently?

    The primary reason there are different ways of calculating a company's capital employed is because there are different definitions ... Read Full Answer >>
  3. What are some of the advantages and disadvantages of absorption costing?

    Companies must choose between using absorption costing or variable costing in their accounting systems. There are advantages ... Read Full Answer >>
  4. What is the difference between the cost of capital and the discount rate?

    The cost of capital refers to the actual cost of financing business activity through either debt or equity capital. The discount ... Read Full Answer >>
  5. How can I calculate prime costs?

    In business accounting, prime cost refers to the total expense that can be directly attributed to the production of a manufactured ... Read Full Answer >>
  6. Why does zero-based budgeting require ongoing evaluation and management?

    Zero-based budgeting must have ongoing evaluation and management due to the fact a zero-based budget requires management ... Read Full Answer >>
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. Investing

    Zooming In On Net Operating Income

    NOI is a long-run profitability measure that smart investors can count on.
  3. Options & Futures

    EBITDA: Challenging The Calculation

    This measure has a bad rap, but it's still a valuable tool when used appropriately.
  4. Options & Futures

    Advanced Financial Statement Analysis

    Learn what it means to do your homework on a company's performance and reporting practices before investing.
  5. Investing Basics

    Explaining Write-Downs

    A write-down is a reduction in the book value of an asset because it is overvalued compared to the market value.
  6. Investing

    Apple or Google: Which is the Better Bet?

    Apple and Google have made many investors rich since the turn of the century. Which is more appealing going forward?
  7. Economics

    What is Involved in Inventory Management?

    Inventory management refers to the theories, functions and management skills involved in controlling an inventory.
  8. Fundamental Analysis

    Calculating Net Interest Margin

    Net interest margin is a metric used to measure the effectiveness of a company’s investment decisions, particularly financial institutions.
  9. Economics

    What are Noncurrent Assets?

    Noncurrent assets are property that a company owns that will last for more than one year.
  10. Investing Basics

    How Much Do CPAs Make?

    If you're considering becoming a CPA, here's what you might expect to earn.

You May Also Like

Hot Definitions
  1. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  2. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  3. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  4. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  5. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  6. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
Trading Center