Short for earnings before interest, taxes, depreciation, and amortization. EBITDA is often used instead of net income by companies with heavy depreciation charges on their income statements. Investors should always look at EBITDA with caution, because it’s not officially sanctioned by the nation’s accounting rules, and there’s no standard way of figuring it. Still, it can be a useful number to know in conjunction with — but not in place of — reported net income.
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