Earnings before interest, taxes, and depreciation

Accounting

Historical cost Constant purchasing power Management Tax
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Selected accounts Assets Cash Cost of goods sold Depreciation / Amortization Equity Expenses Goodwill Liabilities Profit Revenue
Accounting standards Generally-accepted principles Generally-accepted auditing standards Convergence International Financial Reporting Standards International Standards on Auditing Management Accounting Principles
Financial statements Annual report Balance sheet Cash-flow Equity Income Management discussion Notes to the financial statements
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Earnings before interest, taxes, and depreciation (EBITD or EBDIT), sometimes called profit before depreciation, interest, and taxes (PBDIT), is an accounting metric.^[1] Some people find it useful to know this value for a business. On the other hand, some businesses may emphasize this value in publicity or reports to investors, instead of the GAAP or other standard earnings or income value.

In finance, EBITD is sometimes used in capital budgeting calculations as a starting point in order to create templates that can be easily changed to observe the effects of changing variables (such as tax rates, allowances for inflation or changes in depreciation methods) on a net present value (NPV) or internal rate of return (IRR) value, and thus, the viability of a potential investment or project.^[2]

References

↑ NASDAQ: Earnings before interest, taxes, and depreciation (EBITD)
↑ Frino, Hill & Chen (2009), "Introduction to Corporate Finance" 4th ed.

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Earnings before interest, taxes, and depreciation

See also

References