EBITDA

EBITDA - Earnings Before Interest, Taxes, Depreciation, and Amortisation.


Interest: the company would have borrowed money. This is the amount it needs to pay back.

Taxes: the company owes the government some taxes.

Depreciation: the company owns assets. These would differ from industry to industry. But the assets lose value over time. Like say a company car – it would lose its value with time.

Companies have machinery, vehicles, computers, and even furniture that lose value with time.

Amortization: this refers to the cost of intangible assets like patents, copyrights, etc.


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