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Definition
EBITDA is earnings before interest, tax, depreciation and amortisation. By removing financing, tax and non-cash charges, it aims to show the profit a business generates from its core operations, independent of how it's financed or its accounting choices.
In plain terms
It's a way of asking 'how profitable is the actual business?' — before the effects of debt, tax rates and paper charges muddy the picture.
Why it matters for your company
Lenders and buyers use EBITDA to gauge debt capacity and value. It's useful but not cash — it ignores real capital needs. See profit vs cash flow.
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