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A company's earnings before interest, taxes, depreciation, and amortization (commonly abbreviated EBITDA, [1] pronounced / ˈ iː b ɪ t d ɑː,-b ə-, ˈ ɛ-/ [2]) is a measure of a company's profitability of the operating business only, thus before any effects of indebtedness, state-mandated payments, and costs required to maintain its asset base.
Enterprise value/EBITDA (more commonly referred to by the acronym EV/EBITDA) is a popular valuation multiple used to determine the fair market value of a company. By contrast to the more widely available P/E ratio (price-earnings ratio) it includes debt as part of the value of the company in the numerator and excludes costs such as the need to replace depreciating plant, interest on debt, and ...
A financial ratio or accounting ratio states the relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting , there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization.
One popular metric that analysts and other financial advisors use for determining the success of a company is EBITDA. It measures a company's earnings, excluding certain …
If you've read or listened to the earnings reports of companies you follow, you've probably heard the term "EBITDA." But what exactly does it mean, and why is it important? Why do some companies ...
The EV-to-EBITDA ratio is one of the most common ways to value pipeline stocks given their debt and growth capex. ET EV to EBITDA (Forward) Chart. Data by YCharts.
A professional investor contemplating a change to the capital structure of a firm (e.g., through a leveraged buyout) first evaluates a firm's fundamental earnings potential (reflected by earnings before interest, taxes, depreciation and amortization and EBIT), and then determines the optimal use of debt versus equity (equity value).
EBITDA, which is not required to be included in an income statement, focuses on the operating performance of a business. Revenue, which is always reported on a business income statement, consists ...