EBITDA
Earnings before interest, tax, depreciation, and amortisation.
Last reviewed 12 September 2026
EBITDA strips out financing and accounting effects to approximate operating performance. Investors use it to compare companies with different debt and asset structures.
It is not cash. EBITDA ignores working capital swings and capital spending, which is exactly where most small companies lose their money.
Frequently asked
What is ebitda?+
Earnings before interest, tax, depreciation, and amortisation. EBITDA strips out financing and accounting effects to approximate operating performance. Investors use it to compare companies with different debt and asset structures. It is not cash. EBITDA ignores working capital swings and capital spending, which is exactly where most small companies lose their money.
Why does ebitda matter for founders?+
It is not cash. EBITDA ignores working capital swings and capital spending, which is exactly where most small companies lose their money.
Related terms
Net profit
What remains after every cost, including tax and interest.
P&L (profit and loss)
A statement of revenue, costs, and profit over a period.
Cash flow
The money that actually moved in and out of your bank account over a period.
Working capital
Short-term assets minus short-term liabilities — the money running your operations.
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