EBITDA

Formal

One of a number of measures of the profitability of a company - ‘Earnings Before Interest, Tax, Depreciation and Amortisation’ - it defines the cash profitability of the ongoing business excluding non-operating and non-cash expenses. Useful because it allows valuation of underlying businesses inside companies excluding structural and other special items.

Straight Talk

So I’ve too many loans, paid too much for other businesses at the height of the boom, and my share price is under pressure. If I could value a business without recognising all those ‘historic’ mistakes then this is what its profitability would be. So, moving forward, if I can’t afford all those obligations, then this is what the real business is worth without all this financial clutter. Get out of jail free? No.

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