Abbreviation for Earnings Before Interests, Taxes, Depreciation and Amortization; this refers to operating profit before – interest payments on borrowings, – taxes (tax expense), – depreciation on plant and equipment and – amortization on intangible assets. To a certain extent, this indicator allows comparisons to be made between the operating performance of companies which, from an international perspective, prepare their accounts under different legal systems. It is therefore of some importance for rating purposes. – See cash flow, CROCI, businesses, operating, imparity principle, leverage multiples, cash provided by operating activities, net income.
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