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Finance & Banking vocabulary · Financial Statements

EBITDA

Meaning in finance & banking, with examples

abbreviationCommon term

In finance & banking, EBITDA means: Short for earnings before interest, taxes, depreciation and amortization: a measure of a company's operating profit before financing costs and non-cash expenses.

In Turkish: FAVÖK, faiz, amortisman ve vergi öncesi kar

How it is used

Widely used by credit analysts and in loan agreements, for example in the ratio of net debt to EBITDA and in covenants. Usually said as one word: EE-bit-dah. It is not a standard IFRS line, so companies may calculate it differently.

Example sentences

  1. The loan covenant requires net debt to stay below three times EBITDA.

  2. EBITDA rose 20 percent, but higher interest costs hurt net income.

Common collocations

  • net debt to EBITDA
  • EBITDA margin
  • adjusted EBITDA
  • EBITDA growth
  • net incomeWhat is left of a company's revenue after all costs, interest, taxes and other expenses are deducted. When it is negative, it is called a net loss.
  • depreciationSpreading the cost of a long-term physical asset, such as a machine or building, over its useful life; also a fall in the value of a currency or asset.
  • leverageUsing borrowed money to finance assets or investments, or the level of a company's debt compared with its equity or earnings.
  • income statementA financial statement showing a company's revenue, costs and profit or loss over a period, such as a quarter or a year.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Financial Statements

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This page explains English vocabulary for learners. It is not financial advice.