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Glossary

EBITDA — What Is It?

Operating profit plus depreciation and amortization—an approximation of the cash generated by the business.

Explanation

An acronym for earnings before interest, taxes, depreciation, and amortization. It allows for comparison of companies with different debt levels and asset ages, as it excludes costs not directly resulting from current operations.

It has a significant limitation: the excluded depreciation and amortization represent real asset wear and tear that will eventually need to be replaced. A company with high EBITDA and consistently negative cash flow is not healthy — it's just well-described.

Example

Operating profit of 120 million PLN plus depreciation and amortization of 40 million PLN gives EBITDA of 160 million PLN.

Related Terms

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Portevo displays this and dozens of other metrics for specific companies, along with an earnings calendar and your portfolio.

Portevo is not an investment advisor. The data and analyses are for informational and educational purposes only and do not constitute a recommendation or an offer to buy or sell financial instruments. Quotes are from external providers and may be delayed. You make investment decisions at your own risk.

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