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EBITDA
Term category: Finance/Accounting
In 10 words or less:  EBITDA stands for "earnings before interest, taxes, depreciation, and amortization"

Definition: EBITDA is a rough approximation for cash flow and it is calculated as revenues - expenses (excluding taxes, interest, depreciation, and amortization).

Advice: EBITDA is very important for investment bankers because transactions are often priced as a multiple of EBITDA.  However, it's important to realize that this is a non-GAAP number, which means everyone calculates it different.

 

 

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