Ebitda (Noun)
Meaning
Income before interest and taxes and depreciation and amortization have been subtracted; an indicator of a company's profitability that is watched by investors (especially in leveraged buyouts).
Classification
Nouns denoting possession and transfer of possession.
Examples
- Ebitda is often used as a key measure of a company's ability to generate income for its investors and creditors, particularly in the context of leveraged finance transactions.
- Investors monitoring the company's financial performance track ebitda closely, as it provides insight into its core earning power.
- The private equity firm calculated the target company's ebitda to help justify the price offered in the proposed leveraged buyout.
- As interest rates rose, the company's ebitda margin declined significantly, causing concerns among shareholders.
- A company's reported net income may not accurately reflect its underlying financial health, making ebitda a more useful metric for financial analysts.