Glossary

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortisation. It's a financial metric used to evaluate a company's operating performance. 💼

EBITDA measures a company's profitability by focusing on its core operations, ignoring the effects of financing, taxes, and accounting decisions related to depreciation and amortisation.

For example, a company with an EBITDA of $5 million would have generated $5 million in earnings from its core operations, without considering interest, taxes, depreciation, or amortisation.

Fun fact: EBITDA is often used as a proxy for a company's cash flow from operations. 🏦 However, it's not a perfect measure, as it doesn't account for changes in working capital or capital expenditures. Investors should use EBITDA alongside other financial metrics to get a comprehensive view of a company's financial health.