Profitability
Earnings before interest, taxes, depreciation & amortization
EBITDA
What it is
Operating income with depreciation added back. The idea: approximate the cash the business throws off, neutralising financing choices and accounting rules.
How to read it
Widely used to compare companies across countries or capital structures, and to value them (enterprise value / EBITDA multiple).
What it does not tell you
🪤 EBITDA ignores capital spending — yet a factory or a network does have to be replaced. For capital-hungry businesses it flatters reality considerably. It is NOT an official measure: every company computes it its own way.
Other measures — Profitability
Educational content. Polaris is not a registered investment adviser and makes no recommendation.