What is Earnings Before Interest, Taxes, Depreciation, and Amortization?
A definition of Earnings Before Interest, Taxes, Depreciation, and Amortization
“Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is a financial metric used to evaluate a company’s operating performance by focusing on earnings generated from core business operations, excluding certain expenses.”

Business Glossary > What is Earnings Before Interest, Taxes, Depreciation, and Amortization?
Examples of Earnings Before Interest, Taxes, Depreciation, and Amortization in a Sentence:
EBITDA is often used by investors to assess profitability.
Many companies report EBITDA as a measure of financial health.
Understanding EBITDA can help in comparing similar companies across industries.
Why is Earnings Before Interest, Taxes, Depreciation, and Amortization Important in Business?
EBITDA provides insight into a company’s operational profitability by removing the effects of financing and non-cash expenses. This makes it easier to compare profitability between companies and industries.
Know Your Niche Inside Out by Tomorrow: Learn everything you need to know about a niche from a report rushed to you in 24 hours, (or spend the next 3 weeks researching).
Associated Terms
Here are some associated business terms and synonyms for “Earnings Before Interest, Taxes, Depreciation, and Amortization”:
- Operating Profit
- Core Earnings
- Operating Income
Spotify and EBITDA
Spotify reports its EBITDA to provide investors with insights into its profitability, highlighting operational efficiency despite high financing and depreciation costs.
Final Notes on Earnings Before Interest, Taxes, Depreciation, and Amortization
EBITDA is crucial for evaluating a company’s financial health by focusing on operational efficiency rather than non-operational aspects.
This has been a definition of Earnings Before Interest, Taxes, Depreciation, and Amortization meaning.
Explore more from our Business Term Glossary for Entrepreneurs