# EBITDA

Concept · [Business and metrics](https://ecosystem.samcarlton.com/business)

Also called: earnings before interest taxes depreciation and amortization, adjusted EBITDA

[Earnings](https://ecosystem.samcarlton.com/profit) before interest, taxes, depreciation and amortization. A rough measure of how much money a company's operations make, often used to compare and value established businesses.

**For example:** A [private equity firm](https://ecosystem.samcarlton.com/private-equity) offers to buy a [profitable](https://ecosystem.samcarlton.com/profit) services company for several times its yearly EBITDA.

## Connects to (4)

- [Profit](https://ecosystem.samcarlton.com/profit): What is left of your revenue after every cost is paid.
- [Private equity](https://ecosystem.samcarlton.com/private-equity): Investment firms that buy stakes in, or all of, established private companies, usually aiming to improve them and sell later at a profit.
- [Valuation](https://ecosystem.samcarlton.com/valuation): What the company is agreed to be worth for the purpose of an investment.
- [Gross margin](https://ecosystem.samcarlton.com/gross-margin): The part of each sale you keep after paying the direct cost of making and delivering what you sold.

Map view: https://ecosystem.samcarlton.com/ebitda