SUBSCRIBE
Enter your Name and Email address to get
the newsletter delivered to your inbox.
Please include name of person that directed you to my online newsletter so I can thank them personally.
611 N. Causeway Blvd.
Metairie, LA 70001
Phone: 504-588-9288
Fax: 504-588-9323
5779 Hwy 311, Suite B
Houma, LA 70360
Phone: 985-876-6143
Fax: 985-851-3521
422 E. Lockwood Street, Suite 100
Covington, LA 70433
Phone: 504-588-9288
Fax: 504-227-2290
January 2026
Understanding EBITDA
EBITDA, or Earnings Before Interest, Taxes, Depreciation, and Amortization, is a financial metric used to evaluate a company's operating performance. It measures profitability from its core business activities by excluding non-operating expenses, such as interest and taxes, as well as non-cash charges, including depreciation and amortization. This provides a clearer view of a company's cash flow and operational efficiency, making it easier to compare firms across industries.
To calculate EBITDA, start with net income, then add back interest, taxes, depreciation, and amortization expenses from the income statement. It's widely used by investors and analysts to assess a company's financial health, especially for businesses with high debt or significant assets.
However, EBITDA has limitations. It doesn't account for capital expenditures or changes in working capital, which can impact actual cash flow.
Understanding EBITDA is essential for spring financial reviews to gauge business performance and plan strategically.
CONTACT US
Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.
The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.