EBITDA

Also called Earnings Before Interest, Taxes, Depreciation and Amortization

Earnings before interest, taxes, depreciation, and amortization: a measure of operating profitability that strips out financing and accounting effects to compare the core business.

Why it matters

EBITDA is a common shorthand for how much cash the operations throw off, used in later-stage and acquisition contexts. For early startups it matters less than burn and growth, but it becomes central as you mature.

For example

A company with 5 crore of operating profit adds back 50 lakh of depreciation to report 5.5 crore of EBITDA.

Related terms

Operating Margin Cash Flow Profitability

Go deeper

See how founders actually handle this on Money, pricing and metrics, part of the Starting Up hub.

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