Financial metric that measures a company’s core profitability by excluding non-operating expenses (interest and taxes) and non-cash items (depreciation and amortization). It serves as an alternative to net income, offering a clearer view of operating performance by focusing on earnings from core business activities, unaffected by financing, accounting, or tax decisions.
 
EBITDA formula:
 
EBITDA = Net Income + Interest + Taxes + Depreciation + Amortization