Some analysts compare companies by focusing on earnings before interest,taxes,depreciation,and amortization (EBITDA),rather than net income.

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EBITDA is an abbreviation for "earnings before interest,taxes,depreciation,and amortization." It is a measure of operating performance that some managers and analysts use in place of net income.Analysts calculate EBITDA by starting with net income and then adding back depreciation and amortization expense (as well as nonoperating expenses such as interest and taxes).The idea is that this measure allows analysts to conduct financial analyses without having to deal with possible differences in depreciation and amortization.

Some Analysts Compare Companies by Focusing on Earnings Before Interest,taxes,depreciation,and