Earnings before interest, taxes, depreciation, and amortization

Let's say I have a candy store and it makes some money. But, before we can see how much money we really made, we have to pay some important stuff.

First, we need to pay all the people that work with us. Then we have to pay for the things we used to make these candies, like the sugar, chocolate, and wrapping papers. After that, we also have to pay the store's rent, electricity, water, and all the other bills. All those costs add up and are called "expenses".

Now, there are some costs that we don't include in our expenses because they don't happen every day, like repaying loans for the candy store, taxes, and the things that we use to make the candy (called assets), which wear down over time. These costs are really important but don't happen every day, so we don't include them in our usual expenses.

Finally, earnings before interest, taxes, depreciation, and amortization (EBITDA), is the total amount of money we made without subtracting those important costs that don't occur every day. It helps us see how much money we made solely from our daily operations, or making candies.

So, EBITDA is like the money we made from selling candies, once we finish paying for all the usual stuff, but before we pay for our loans or taxes, and before we subtract the costs of our assets wearing down.