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Income statement

EBITDA

Earnings before interest, taxes, depreciation, and amortization — a rough proxy for operating cash generation.

Part of the Reading Financial Statements course · Lesson 7 of 33
Formula
Operating Income (EBIT) + Depreciation + Amortization

What it is

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It takes operating profit and adds back depreciation and amortization, which are non-cash accounting charges for the wearing-down of assets. The result approximates the cash a company's operations produce before financing, taxes, and capital costs.

Why it matters

EBITDA is widely used to compare profitability across companies with different debt, tax, and asset-aging profiles, and it underpins common valuation multiples like EV/EBITDA. The major pitfall is that it ignores real capital spending and interest, so it can make capital-heavy or highly indebted companies look healthier than they are; it is not a measure defined by GAAP or IFRS.

How it's calculated

Start with operating income (EBIT) and add back depreciation and amortization, or start from net income and add back interest, taxes, depreciation, and amortization.

How Quintarthai uses it

EBITDA and the EV/EBITDA multiple are available in the enterprise-value and multiples sections of the Ratios tab on each company page.

Cross-border note. EBITDA is a non-standard measure under both IFRS and US GAAP, so its exact definition can vary by filer; check the reconciliation in the source filing (SEDAR+ for Canada, SEC EDGAR for the US) before comparing.

FAQ

Is EBITDA the same as cash flow?
No. EBITDA ignores changes in working capital, capital expenditures, interest, and taxes, so it can differ substantially from actual operating cash flow.
Why do companies highlight EBITDA?
Because adding back depreciation, amortization, interest, and taxes usually produces a larger, smoother number — useful for comparison, but it can also mask heavy capital or debt costs.
Related terms
Operating Income (EBIT)Net IncomeGross ProfitRevenueEffective Tax Rate
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