EBITDA

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It measures how much money a company makes before paying the money it has to pay to others like the government, banks, and other businesses and organizations that it owes money to. It includes all the money the company makes from selling products and services. It doesn't include any of the costs that the company pays for things like buying inventory or paying salaries. Think about it like this: if you have $5 but you owe your friend $2, then your EBITDA is $3.