EBITDA: Earnings Before I Trick the Dumb Accountant, but formally defined as Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of the underlying earnings of the business; calculated as Revenue Expenses (excluding tax, interest, depreciation, and amortization). EBITDA is an important measure because it looks at underlying earnings, before financing costs and accounting adjustments such as depreciation and amortization. Prices of loans and companies are often expressed as a function of that figure. Hence, your EBITDA is big deal. Note an important finance gravity rule: An EBITDA always steadily goes up over ti me in a management presentation.
