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What is EBITDA and how to calculate it?

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a financial metric that measures a company’s operating performance, by excluding the impact of non-operating expenses such as interest expenses, taxes, depreciation, and amortization.

The formula to calculate EBITDA is:

EBITDA = Revenue – Operating Expenses (excluding Depreciation and Amortization)


  • Revenue is the total amount of money a company generates from its sales
  • Operating Expenses are all the expenses incurred in the day-to-day running of a business, excluding Depreciation and Amortization.
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