EBITDA

Category

Income Statement

Units

Currency

Formula

EBIT + Depreciation & Amortization

US-GAAP elements

NetIncomeLossIncomeTaxExpenseBenefitInterestExpenseDepreciationDepletionAndAmortization

Reference

Non-GAAP measure: Regulation G and Regulation S-K Item 10(e)

Source

Reported in SEC EDGAR filings (US-GAAP XBRL taxonomy)

EBITDA, or earnings before interest, taxes, depreciation, and amortization, is a company's profit with interest expense, income taxes, and depreciation and amortization all added back. It is calculated from figures reported in SEC filings and is widely used as a rough proxy for the cash earnings a business generates from its operations.

By removing financing costs, taxes, and the non-cash charges tied to past investment, EBITDA puts companies with different debt loads, tax positions, and asset ages on a more comparable footing.

EBITDA is not a US GAAP line item and has no XBRL element of its own. GeminIQ takes it from the filing when a company reports it and otherwise calculates it as EBIT plus depreciation and amortization, where EBIT is net income plus income tax expense plus interest expense. Depreciation and amortization usually comes from the cash flow statement, tagged DepreciationDepletionAndAmortization, because most companies do not show it as a separate income statement line.

When a company reports EBITDA itself, it is a non-GAAP measure under Regulation G and Regulation S-K Item 10(e) and must be reconciled to net income. SEC staff guidance expects a measure labeled EBITDA to follow the standard definition. Figures that also remove items such as stock-based compensation, restructuring, or impairments should be labeled differently, typically as adjusted EBITDA. Adjusted versions vary widely between companies, so read the reconciliation before comparing them.

EBITDA's main uses are in EV/EBITDA valuation and in leverage ratios such as total debt to EBITDA, which lenders often write into loan covenants. Its main weakness is that it ignores capital spending. A company that must reinvest heavily to stay competitive can show strong EBITDA and weak free cash flow, which is why analysts often look at EBITDA minus capital expenditures alongside it. It also ignores changes in working capital and the cash actually paid for interest and taxes.