Earnings before interest, taxes, depreciation, and amortization (EBITDA) is a financial metric that can help you understand your company’s cash flow from its core activities.
EBITDA, short for Earnings Before Interest, Taxes, Depreciation, and Amortization, is a financial metric used by small business owners to assess their company's operational profitability and cash flow. It represents the earnings generated from core business operations before accounting for interest payments, taxes, and non-cash expenses like depreciation and amortization. EBITDA provides insights into the company's ability to generate consistent income, measure operating efficiency, and compare performance across different businesses or industry sectors. Small business owners often utilize EBITDA to evaluate financial health, make informed decisions, and attract potential investors or lenders.