Private Equity Glossary


“Earnings Before Interest, Taxes, Depreciation and Amortization”: A measure of cash flow calculated as: Revenue – Expenses (excluding tax, interest, depreciation and amortization). EBITDA looks at the cash flow of a company. By not including interest, taxes, depreciation and amortization, we can clearly see the amount of money a company brings in. This is especially useful when one company is considering a takeover of another because the EBITDA would cover any loan payments needed to finance the takeover.

« Back to Glossary Index