Earnings Before Interest Taxes Depreciation and Amortization (Banking & Finance Glossary)

Summary

The EBITDA of a business forms a part of certain Financial Covenants ratios that a Borrower must meet from time to time and is used to measure the Cash Flow of a company. EBITDA eliminates the impact of financing and accounting decisions, so Lenders often look to this figure to assess the Borrower’s financial ability to repay debt.