Operating Income (EBIT) + Depreciation + Amortization
EBITDA approximates cash operating profit before financing and non-cash items.
▶ Watch: EBITDA explained in 24 seconds
What it is
EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It takes operating profit and adds back depreciation and amortization, which are non-cash accounting charges for the wearing-down of assets. The result approximates the cash a company's operations produce before financing, taxes, and capital costs.
Why it matters
EBITDA is widely used to compare profitability across companies with different debt, tax, and asset-aging profiles, and it underpins common valuation multiples like EV/EBITDA. The major pitfall is that it ignores real capital spending and interest, so it can make capital-heavy or highly indebted companies look healthier than they are; it is not a measure defined by GAAP or IFRS.
How it's calculated
Start with operating income (EBIT) and add back depreciation and amortization, or start from net income and add back interest, taxes, depreciation, and amortization.
How Quintarthai uses it
EBITDA and the EV/EBITDA multiple are available in the enterprise-value and multiples sections of the Ratios tab on each company page.
Cross-border note. EBITDA is a non-standard measure under both IFRS and US GAAP, so its exact definition can vary by filer; check the reconciliation in the source filing (SEDAR+ for Canada, SEC EDGAR for the US) before comparing.
FAQ
Is EBITDA the same as cash flow?
No. EBITDA ignores changes in working capital, capital expenditures, interest, and taxes, so it can differ substantially from actual operating cash flow.
Why do companies highlight EBITDA?
Because adding back depreciation, amortization, interest, and taxes usually produces a larger, smoother number — useful for comparison, but it can also mask heavy capital or debt costs.
Check your understanding
What is the main reason EBITDA can make a capital-intensive or heavily indebted company look healthier than it actually is?
By adding back depreciation, amortization, and interest, EBITDA ignores genuine capital expenditure and debt costs, flattering capital-heavy or leveraged firms.