EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a widely used measure of a company's core business performance.
The formula: EBITDA = Net Profit + Interest + Taxes + Depreciation + Amortization.
By stripping out interest, taxes, and non-cash charges (depreciation/amortization), EBITDA provides a clearer view of operational profitability. It's useful for comparing companies across industries and is a key tool in corporate valuation.
However, EBITDA has limitations — it's not actual cash flow because it ignores capital expenditures, working capital changes, and debt repayment.
In Bangladesh, companies use EBITDA for performance comparison, especially across different sectors.