Earnings Before Interest, Taxes, Depreciation & Amortization.
| EBITDA = | Net sales |
| - Operating expenses (COGS, SG&A) | |
| - R& D expenses | |
| - Net provisions | |
| + Associated companies & income |
EBITDA/Net sales is commonly used to measure the profitability of a company, as well as EBIT/Net sales. EBITDA provides a better comparison between companies from different countries as it avoids the impact of different domestic amortization rules. EBITDA is also useful when comparing companies from different sectors in the same country, as amortization rates are closely linked to the business itself.
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