EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortisation.

EBITDA = Operating Income (EBIT) + Depreciation & Amortisation

Approximation of the cash a company generates from its day-to-day operations available to repay its debts.

Drawback: Does not adjust for capital expenditures and working capital investments. Cash used for these purposes are not available to pay off debts.

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