Glossary · Accounting & Audit
EBITDA
Earnings Before Interest, Taxes, Depreciation, and Amortisation — a measure of operating profitability that strips out financing and non-cash items.
EBITDA reflects the operating cash earnings of a business before the impact of capital structure, tax jurisdiction, and non-cash charges. It is widely used in valuation multiples (EV/EBITDA), bank covenants, and management performance analysis. EBITDA is not an Ind AS metric and should be reconciled to profit after tax. EBITDA margin (EBITDA / Revenue) is a key indicator of operational efficiency.
Examples
A SaaS company with ₹10 lakh operating profit, ₹2 lakh depreciation, and no interest expense has EBITDA of ₹12 lakh.