Definition : EBITDA

Like many terms, EBITDA is an American acronym for "Earnings Before Interests, Taxes, Depreciation and Amortization".

In French, this means earnings before interest, taxes, depreciation and amortization. This calculation will allow to know the income of a company before all the deductions such as taxes or provisions on fixed assets. To calculate it, two ways are possible: the additive way and the subtractive way.

- net income + interest + taxes + depreciation and provisions

- sales (excluding tax) - purchases - expenses (external, other)

The differences with the EBITDA 

EBITDA and EBITDA are two very similar concepts in finance. The latter does not take into account operating provisions, unlike EBITDA. EBITDA includes in its calculations the income as well as the exceptional expenses and the participation of the employees, contrary to the EBE. 

When valuing a company, EBITDA is very often used as the basis before applying a sector multiple, as it is a relevant indicator of the company's profitability.

If you wish to have your company evaluated with EBITDA, do not hesitate to contact one of our experts: contact a XVAL consultant.