EBITDA
What is it?
Acronym for earnings before interest, taxes, depreciation, and amortization. Es una medida financiera que indica los beneficios operativos de una empresa antes de tener en cuenta los costos financieros, impuestos y la depreciación de los activos.
Ebitda is a widely used tool for assessing a company’s operational profitability and efficiency without considering its capital structure, accounting policies, or tax burdens. By excluding these factors, it provides a clearer view of the company’s ability to generate profits through its core activities.
Key aspects to consider
Ebitda is calculated by adding back to net income the interest, taxes, depreciation, and amortization. It is useful for:
- Company comparison: Eliminates distortions caused by different financial structures and accounting practices.
- Business valuation: It is used in methods such as the EV/EBITDA multiple to estimate the value of a company.
- Operational assessment: Measures the company’s ability to generate revenue before external factors.
However, Ebitda has limitations, as it does not reflect actual cash flows and does not consider non-cash expenses, such as depreciation, which affect the value of assets. Therefore, it should be complemented with other metrics to obtain a complete picture of financial health.