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 time in a management presentation. The Alternative Oxford Private Equity Dictionary
