What is the acronym EBITDA short for?

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. This financial metric is widely used to assess a company's operating performance without the influence of financing and accounting decisions. By excluding interest and taxes, EBITDA focuses on the core profitability generated from operations. Additionally, depreciation and amortization, which account for non-cash expenses related to long-term assets, are also excluded to provide a clearer picture of operational efficiency.

This focus allows investors and analysts to evaluate and compare the profitability of companies in similar industries, irrespective of their capital structure or tax considerations. Overall, understanding EBITDA is crucial for assessing a company's financial health and operating performance.