Income Statement
EBITDA
Earnings before interest, taxes, depreciation, and amortization.
Definition
EBITDA adds non-cash depreciation and amortization back to operating profit. The idea: get a number that approximates cash generation from operations, ignoring accounting choices about how to expense long-lived assets.
Formula
Operating Profit + Depreciation + Amortization
Why it matters
EBITDA is widely used in M&A and credit analysis because it's harder to manipulate than reported earnings, and it's broadly comparable across companies with different capital intensities. Charlie Munger famously called it 'bullshit earnings' — that warning is fair: EBITDA ignores real costs of maintaining the asset base.
How Standard Equity uses it
Not shown in the table. Used for net debt / EBITDA in the SE Grade's quality pillar, and forward EV/EBITDA is given to the AI analyst.
The metric
| Category | Income Statement |
|---|---|
| Unit | $M |