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Why is EBITDA important as a business metric (KPI)?


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Why is EBITDA important as a business metric (KPI)?
in Data Science & Statistics by ♦ Platinum (97.7k points) | 477 views

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EBITDA stands for Earnings Before Interest, Taxes, Depreciation and Amortisation. It is a widely used operational profitability measure that allows comparing companies without the potentially distorting effects and possible manipulations of financing and accounting decisions.

 

To measure EBITDA you simply take the sales revenue and subtract all expenses other than interest, taxes, depreciation, and amortization.

 

EBITDA = Revenue - Expenses (excluding interest, tax, depreciation and amortisation)

 

by ♦ Platinum (97.7k points)

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