Meaning of EBITDA

What ls EBITDA?

EBITDA stands for “Earnings Before Interest, Taxes, Depreciation and Amortization”.

EBITDA is a financial indicator, also called Lajida, and represents how much a company generates resources through its operational activities, not counting taxes and other financial effects.
EBITDA is important for entrepreneurs and business managers, since it gives them the possibility of not only analyzing the end result of the organization, but the process as a whole, and this indicator is widely used in the stock market.

EBITDA is used essentially to analyze the performance of organizations, since it is capable of measuring the productivity and efficiency of the company, a point that is essential for the entrepreneur who intends to invest. The term is widely used by financial analysts in analyzing the balance sheets of publicly traded companies.

Calculate EBITDA

To calculate EBITDA, it is first necessary to calculate operating profit, which is the subtraction from net revenue, cost of goods sold (CPV), operating expenses and net financial expenses (expenses excluding less interest income and other financial items).

Then, it is only added to the operating profit, depreciation and amortization that are included in COGS and operating expenses.

Other Meanings of EBITDA

Acronym Definition
EBITDA Earnings Before Income Tax, Depreciation and Amortization
EBITDA Earnings Before Interest, Tax, Depreciation and Amortization
EBITDA Earnings Before Interest, Taxes and Depreciation, Depletion and Amortization