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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.
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).
In business, operating margin—also known as operating income margin, operating profit margin, EBIT margin and return on sales (ROS)—is the ratio of operating income ("operating profit" in the UK) to net sales, usually expressed in percent.
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 ...
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It may be calculated as either EBIT or EBITDA divided by the total interest expense. Times-Interest-Earned = EBIT or EBITDA / Interest Expense [1] When the interest coverage ratio is smaller than one, the company is not generating enough cash from its operations EBIT to meet its interest obligations.
We delivered 338 million of EBIT with a margin of 10.6%, up 280 basis points. This was 105th -- 105 basis points greater than EBITDA margin expansion, driven by lower stock-based comp and ongoing ...
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 ...