This video talks about what is EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), and explains how it will help us to measure the financial performance of a company.
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What is EBITDA?
It stands for Earnings Before Interest Tax Depreciation & Amortisation (EBITDA). It is used by the Investors and Analysts as a benchmark of profitability while comparing two or more companies. This helps to determine which company is profitable and which is not in case they have similar product. We can identify EBITDA by analysing P&L statement
In its simplest form, EBITDA is calculated in the following manner:
EBITDA = Operating Profit + Depreciation Expense + Amortization Expense
EBITDA gives investors a good idea of how a company is doing financially and paints a portrait of how much cash a young or restructured company may generate before paying its debts.
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