Treasury Practice

Abbreviation Arena: EBITDA

Published: Jan 2022

Abbreviation Arena: EBITDA (earnings before interest, taxes, depreciation and amortisation)

EBITDA represents a company’s earnings before interest, taxes, depreciation and amortisation. It is an accounting measure calculated using a company’s earnings, before interest expenses, taxes, depreciation and amortisation are subtracted, as a proxy for a company’s current operating profitability. Because the margin ignores the impacts of non-operating factors such as interest expenses, taxes, or intangible assets, the result is a metric that is a more accurate reflection of a firm’s operating profitability.

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