What is EBITDA?
Finance & accounting. A plain-English definition for Australian business owners.
EBITDA is earnings before interest, taxes, depreciation and amortisation — a measure of underlying operating profitability that strips out the effects of financing structure, tax position and non-cash accounting charges.
Buyers, lenders and valuers use EBITDA, often normalised to remove one-off items and above- or below-market owner salaries, as the common yardstick for comparing businesses, and many SME sale prices are expressed as a multiple of it. EBITDA is not cash flow: it ignores capital expenditure, working capital movements and debt repayments, so it flatters capital-hungry businesses.
In a connected back office this sits with the Finance hub, where Valont runs bookkeeping, managed payroll and bas & tax compliance for Australian SMEs as one team. The full definition set is on the glossary.
Talk to an Advisor
General information, not advice. For how this applies to your business, talk it through with a Trusted Advisor or start with the Business Health Check.