EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is the most widely used measure of operating profitability in M&A and is the basis for most business valuations. Buyers use EBITDA to compare companies across industries and determine what multiple they are willing to pay.
Definition
Understanding EBITDA
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is the most widely used measure of operating profitability in M&A and is the basis for most business valuations. Buyers use EBITDA to compare companies across industries and determine what multiple they are willing to pay.
Related Concepts
Related Terms
- Enterprise value
- Valuation multiples
- Financial modeling
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