EBITDA

Deal Terms

Earnings Before Interest, Taxes, Depreciation, and Amortization. A proxy for operating cash flow that PE uses to compare companies across capital structures. It is the base of the EBITDA multiple used to value and buy businesses.

Example

A company with 20 of revenue and 6 of EBITDA is valued on that 6, not its bottom line.

Related terms

• Accretion and Dilution
• Bolt On
• Data Room

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