EBITA

[Paul G. Silva]

Hello everyone,

Yesterday one of you asked me a great question "What the hell is EBITA?"

Thanks your your friend and mine GOOGLE we have a nice definition...

"Earnings Before Interest, Taxes, Depreciation, and Amortization - EBITDA

An indicator of a company's financial performance calculated as:

EBITA = Revenue - Expenses (excluding tax, interest, depreciation, and
amortization)

EBITDA can be used to analyze the profitability between companies and
industries, because it eliminates the effects of financing and
accounting decisions.

Notes:
A common misconception is that EBITDA represents cash earnings. EBITDA
is good metric to evaluate profitability, but not cash flow.

EBITDA first came into common use with leveraged buyouts in the '80s,
where it was used to indicate the ability of a company to service debt.
As time passed, it became popular in industries with expensive assets
that had to be written down over long periods of time. EBITDA is now
commonly quoted by many companies, especially in the technology sector,
even when it isn't warranted. Consequently, EBITDA is often used as an
accounting gimmick to dress up a company's earnings."

Source...
http://financial-dictionary.thefreedictionary.com/Ebita

But, for all of you with a science background, Lynn summed it up far
more nicely as...

"EBITA is a normalized profit."

I hope you find this helpful!

[Paul G. Silva]

Sorry, that email was meant for the students!

--
Paul G. Silva
Co-founder
All inPlay LLC
Fun and Friendship for All!
http://www.allinplay.com