EBITDA Ratio is a widely used finance term, but it is also one of the most misunderstood. In everyday business analysis, it usually means EBITDA as a percentage of revenue, often called EBITDA margin. In lending, valuation, and equity research, it can also refer more broadly to any ratio built around EBITDA, such as Debt/EBITDA or EBITDA interest coverage. Understanding which version is being used is essential before you compare companies, assess leverage, or judge profitability.

1. Term Overview

• Official Term: EBITDA Ratio
• Common Synonyms: EBITDA margin (most common in corporate performance discussions), EBITDA-based ratio, EBITDA profitability ratio
• Alternate Spellings / Variants: EBITDA-Ratio
• Domain / Subdomain: Finance / Performance Metrics and Ratios
• One-line definition: A ratio that relates EBITDA to another financial measure—most commonly revenue—to evaluate operating performance, leverage, or debt-servicing ability.
• Plain-English definition: It shows how much earnings a business generates from its operations before interest, taxes, and non-cash asset charges, usually compared with sales, debt, or interest expense.
• Why this term matters: It helps managers, investors, analysts, and lenders compare companies more consistently, especially when financing structures, tax rates, and depreciation policies differ.

2. Core Meaning

At its core, EBITDA Ratio is about putting EBITDA into context.

A business may report EBITDA of 50 crore, 50 million, or 500 million, but that number alone says very little. Is it strong or weak? Efficient or inefficient? Safe or risky? To answer that, analysts compare EBITDA with something else, such as:

• Revenue to measure operating profitability
• Debt to measure leverage
• Interest expense to measure debt-service ability
• Enterprise value to support valuation analysis

What it is

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of operating earnings before:

• financing costs
• tax effects
• non-cash depreciation and amortization charges

An EBITDA ratio is any ratio that uses EBITDA as a numerator or denominator.

Why it exists

It exists because raw earnings figures can be distorted by:

• different capital structures
• different tax jurisdictions
• different depreciation methods
• different asset ages
• different acquisition histories

By focusing on EBITDA, analysts try to look at the business’s operating engine before those factors.

What problem it solves

It helps solve the comparability problem.

For example, two companies may sell similar products and have similar operating strength, but one may have:

• more debt, causing higher interest expense
• older factories, causing lower depreciation
• lower taxes because of incentives
• recent acquisitions, causing more amortization

Net profit alone may not fairly compare them. EBITDA-based ratios help isolate operating performance or debt capacity.

Who uses it

Common users include:

• management teams
• equity analysts
• credit analysts
• bankers and lenders
• private equity investors
• boards of directors
• rating agencies
• students and exam candidates

Where it appears in practice

You will commonly see EBITDA ratios in:

• earnings presentations
• lender covenant reports
• annual reports and MD&A-style discussions
• peer comparison tables
• valuation models
• due diligence reports
• credit memos
• investment screening tools

3. Detailed Definition

Formal definition

EBITDA Ratio is not a single universally standardized accounting term. In practice, it refers to a ratio involving EBITDA, most commonly:

• EBITDA Margin = EBITDA / Revenue
• Debt/EBITDA = Total Debt / EBITDA
• EBITDA Interest Coverage = EBITDA / Interest Expense

Technical definition

EBITDA is usually calculated as:

• EBITDA = EBIT + Depreciation + Amortization

or

• EBITDA = Net Income + Interest + Taxes + Depreciation + Amortization

An EBITDA ratio then compares that EBITDA amount to another financial quantity depending on the analytical objective.

Operational definition

In day-to-day finance work, the meaning changes by use case:

• Performance analysis: EBITDA ratio often means EBITDA margin
• Credit analysis: EBITDA ratio often means Debt/EBITDA or Net Debt/EBITDA
• Debt-service analysis: EBITDA ratio can mean EBITDA/Interest
• Valuation analysis: EBITDA appears in EV/EBITDA, which is usually called a multiple rather than a margin or leverage ratio

Context-specific definitions

In corporate performance analysis

“EBITDA ratio” most often means:

EBITDA Margin = EBITDA ÷ Revenue

This shows how much operating earnings the company produces from each unit of sales.

In lending and banking

“EBITDA ratio” often refers to leverage or coverage:

• Debt/EBITDA
• Net Debt/EBITDA
• EBITDA/Interest

These help lenders judge repayment risk.

In valuation and investing

EBITDA is central to:

• EV/EBITDA

This is a valuation multiple, not a pure profitability ratio, but it is closely related.

In industry-specific usage

The term is less meaningful for:

• banks
• insurance companies
• some financial institutions

because interest income and interest expense are core operating items in those businesses.

In geography or reporting frameworks

Under major accounting frameworks such as GAAP, IFRS, and Ind AS, EBITDA is generally not a mandatory standardized line item in the financial statements. That means companies and analysts must define it clearly and use it consistently.

4. Etymology / Origin / Historical Background

The acronym EBITDA comes from the phrase Earnings Before Interest, Taxes, Depreciation, and Amortization.

Origin of the term

The term became especially popular in corporate finance and leveraged lending because it gave analysts a quick way to estimate operating earnings before financing and non-cash accounting charges.

Historical development

Its rise is closely associated with:

• leveraged buyouts
• high-yield debt markets
• private equity analysis
• covenant-based lending

During the 1970s and 1980s, lenders and buyout firms increasingly focused on whether a company generated enough operating earnings to support debt. EBITDA became a convenient shortcut.

How usage changed over time

Over time, EBITDA moved beyond leveraged finance and became common in:

• equity research
• management reporting
• investor presentations
• sector benchmarking
• M&A valuation

Later, Adjusted EBITDA became widespread, adding back management-defined items such as restructuring charges, litigation costs, and non-cash expenses.

Important milestones

Some notable shifts in practice include:

1. LBO era expansion: EBITDA gained popularity as a debt-capacity proxy.
2. Public market adoption: Analysts started using EBITDA margin and EV/EBITDA more widely.
3. Non-GAAP scrutiny: Regulators increasingly focused on potentially misleading adjusted EBITDA presentations.
4. Lease accounting changes: New lease accounting standards affected comparability of EBITDA across reporting frameworks and periods, especially under IFRS 16.

5. Conceptual Breakdown

To understand EBITDA Ratio properly, break it into five parts.

5.1 EBITDA itself

Meaning: EBITDA represents operating earnings before interest, taxes, depreciation, and amortization.

Role: It tries to show the earnings power of the business before financing, tax environment, and certain non-cash accounting charges.

Interaction with other components: EBITDA is the base number. The usefulness of the ratio depends heavily on what you compare it with.

Practical importance: A high EBITDA number alone means little without a denominator or comparison framework.

5.2 The add-backs: interest, taxes, depreciation, and amortization

Meaning: – Interest reflects financing decisions – Taxes reflect jurisdiction and tax planning – Depreciation reflects wear and use of tangible assets – Amortization reflects the write-off of intangible assets

Role: These are removed to isolate operating earnings before those influences.

Interaction: This makes companies with different debt and asset structures look more comparable, but it can also hide real economic costs.

Practical importance: Adding back depreciation and amortization can help comparisons, but it should never make you forget that assets often need replacement.

5.3 The denominator or comparison base

Meaning: The “ratio” part comes from what EBITDA is compared with.

Common bases include:

• Revenue for profitability
• Debt for leverage
• Interest expense for debt-service ability
• Enterprise value for valuation

Role: The denominator determines what question you are answering.

Interaction: The same EBITDA can imply very different conclusions depending on whether you compare it to sales, debt, or market value.

Practical importance: Always define the denominator before interpreting an EBITDA ratio.

5.4 Time period and normalization

Meaning: EBITDA can be measured for:

• one quarter
• one year
• trailing twelve months (TTM)
• forecast periods

It can also be:

• reported EBITDA
• adjusted EBITDA
• annualized EBITDA

Role: Time period affects stability and comparability.

Interaction: Debt/EBITDA based on a weak quarter can mislead. TTM or normalized EBITDA is often more useful.

Practical importance: Seasonal businesses especially need careful period selection.

5.5 Reported vs adjusted EBITDA

Meaning: Reported EBITDA is based more directly on accounting results. Adjusted EBITDA includes management-defined add-backs or removals.

Role: Adjustments attempt to show “underlying” operations.

Interaction: Adjusted EBITDA can materially change ratios such as Debt/EBITDA.

Practical importance: This is one of the biggest areas of misuse. Repeated “one-time” adjustments are a warning sign.

6. Related Terms and Distinctions

Related Term	Relationship to Main Term	Key Difference	Common Confusion
EBITDA	The base earnings measure used in EBITDA ratios	EBITDA alone is not a ratio	People often say “EBITDA ratio” when they just mean EBITDA
EBITDA Margin	Most common meaning of EBITDA ratio in performance analysis	EBITDA divided by revenue	Confused with operating margin or net profit margin
Adjusted EBITDA	A modified version of EBITDA used in many reports and covenants	Includes management or contract-defined add-backs	Often treated as objective, though it may be subjective
EBIT	Closely related operating earnings measure	EBIT includes D&A EBITDA adds them back	Mistakenly used interchangeably with EBITDA
Operating Income	Often similar to EBIT	Depends on accounting presentation and may exclude/include specific items differently	Sometimes assumed to equal EBITDA
Operating Margin	Another profitability ratio	Usually operating income divided by revenue, not EBITDA divided by revenue	People think EBITDA margin and operating margin are the same
Net Profit Margin	Bottom-line profitability ratio	Includes interest, taxes, and non-operating effects	A company can have strong EBITDA margin but weak net margin
Debt/EBITDA	Common credit ratio built on EBITDA	Measures leverage, not profitability	Higher is not better here; lower is usually safer
Net Debt/EBITDA	Variant of Debt/EBITDA	Uses debt minus cash instead of total debt	Confused with total debt leverage
EBITDA Interest Coverage	Debt-service ratio using EBITDA	Measures ability to cover interest expense	Can be confused with EBIT/interest or DSCR
EV/EBITDA	Valuation multiple using EBITDA	Compares enterprise value to EBITDA, not profitability or leverage directly	Often called a ratio but used more as a valuation multiple
Cash Flow from Operations	Cash-flow measure	Reflects cash movement, working capital, and actual operations cash effects	Mistakenly treated as the same as EBITDA
Free Cash Flow	Post-investment cash measure	Accounts for capital expenditure and often debt/service implications	EBITDA does not equal free cash flow

Most commonly confused terms

The most frequent confusions are:

• EBITDA Margin vs Operating Margin
• EBITDA vs Cash Flow from Operations
• Debt/EBITDA vs EBITDA Margin
• Adjusted EBITDA vs Reported EBITDA
• EV/EBITDA vs P/E Ratio

7. Where It Is Used

Finance and corporate finance

EBITDA ratios are widely used in corporate finance for:

• profitability benchmarking
• capital structure analysis
• debt capacity assessment
• performance dashboards
• board reporting

Accounting and reporting

While EBITDA is not usually a mandatory line item under major accounting frameworks, companies often present EBITDA-based measures in:

• management discussion
• earnings decks
• investor presentations
• internal MIS reports

Stock market and investing

Equity investors use EBITDA ratios to:

• compare operating performance across peers
• assess leverage risk
• evaluate valuation through EV/EBITDA
• track margin trends over time

Banking and lending

Banks and credit funds rely heavily on EBITDA-based ratios for:

• covenant design
• underwriting
• leverage tests
• refinancing decisions
• stress testing

Valuation and M&A

In transactions, EBITDA is central to:

• purchase price multiples
• quality-of-earnings reviews
• synergy analysis
• lender underwriting packages

Business operations

Management teams use EBITDA margin to monitor:

• pricing power
• cost control
• plant efficiency
• store performance
• regional operating quality

Policy and regulation

The term appears in policy and regulation mainly through:

• non-GAAP or alternative performance measure disclosure oversight
• tax rules in some jurisdictions that use EBITDA-like concepts for interest limitation
• debt market disclosure practices

Analytics and research

Researchers and analysts use EBITDA ratios in:

• sector studies
• screening models
• turnaround analysis
• margin decomposition
• risk scoring

Economics

In pure macroeconomics, EBITDA ratio is not a core standard measure. Its main relevance is at the firm or sector level rather than national accounts.

8. Use Cases

8.1 Peer profitability comparison

• Who is using it: Equity analyst
• Objective: Compare operating efficiency across similar companies
• How the term is applied: Calculate EBITDA margin for each company in the sector
• Expected outcome: Identify firms with stronger operating models or pricing power
• Risks / limitations: Sector differences, accounting differences, and lease treatment can distort comparisons

8.2 Loan covenant underwriting

• Who is using it: Banker or credit analyst
• Objective: Assess whether the borrower can safely carry debt
• How the term is applied: Use Debt/EBITDA, Net Debt/EBITDA, and EBITDA/Interest
• Expected outcome: Determine acceptable leverage and covenant headroom
• Risks / limitations: Covenant EBITDA may be heavily adjusted; downturns can quickly worsen ratios

8.3 Turnaround monitoring

• Who is using it: CFO or restructuring advisor
• Objective: Track whether cost cuts and pricing actions are improving the business
• How the term is applied: Compare monthly or quarterly EBITDA margin over time
• Expected outcome: Faster view of operating progress than waiting for annual net profit
• Risks / limitations: One-off savings may overstate true progress

8.4 Acquisition valuation

• Who is using it: Private equity investor or strategic buyer
• Objective: Value a target company and compare deal pricing
• How the term is applied: Analyze historical EBITDA, normalized EBITDA, and EV/EBITDA
• Expected outcome: Better understanding of fair price and post-deal leverage
• Risks / limitations: Over-optimistic adjustments or synergies can inflate value

8.5 Pricing and cost management

• Who is using it: Business owner or operating manager
• Objective: Improve profitability without waiting for bottom-line accounting shifts
• How the term is applied: Monitor EBITDA margin by product, store, region, or plant
• Expected outcome: Better pricing, procurement, labor planning, and overhead control
• Risks / limitations: Ignoring capex needs can make performance look better than economic reality

8.6 Debt refinancing and credit rating discussions

• Who is using it: Treasury team
• Objective: Show lenders or investors that leverage is improving
• How the term is applied: Present trend in Net Debt/EBITDA and interest coverage
• Expected outcome: Better refinancing terms or stronger market confidence
• Risks / limitations: Temporary EBITDA spikes can make leverage look healthier than it really is

9. Real-World Scenarios

A. Beginner scenario

• Background: A small café owner tracks sales and expenses but finds net profit confusing because tax and loan interest change month to month.
• Problem: The owner wants to know whether day-to-day operations are getting stronger.
• Application of the term: The owner calculates EBITDA margin = EBITDA / Revenue each month.
• Decision taken: She notices that margin improves after reducing ingredient waste and raising menu prices slightly.
• Result: Even before annual accounts are finalized, she sees operational improvement clearly.
• Lesson learned: EBITDA margin can be a practical operating scorecard for small businesses.

B. Business scenario

• Background: A manufacturing company reports higher revenue this year.
• Problem: Despite sales growth, cash is tight and the board is worried.
• Application of the term: Management reviews EBITDA margin and finds that raw material inflation compressed margin from 18% to 13%.
• Decision taken: The company renegotiates contracts, changes product mix, and exits a low-margin customer segment.
• Result: Revenue growth slows slightly, but EBITDA margin recovers to 16%.
• Lesson learned: Revenue growth without EBITDA quality can destroy value.

C. Investor / market scenario

• Background: An investor compares two listed companies in the same sector.
• Problem: One company has higher net income, but the other has better market reputation.
• Application of the term: The investor compares EBITDA margin, Net Debt/EBITDA, and EV/EBITDA.
• Decision taken: He chooses the company with slightly lower net income but higher EBITDA margin and lower leverage because its earnings quality and balance sheet are stronger.
• Result: The investment thesis is based on operating strength, not just reported profit.
• Lesson learned: EBITDA ratios are most useful when read alongside leverage and valuation.

D. Policy / government / regulatory scenario

• Background: A listed company highlights “record adjusted EBITDA” in an earnings presentation.
• Problem: The presentation gives very little detail on what was adjusted out.
• Application of the term: Regulators, auditors, or market participants examine whether the company reconciles adjusted EBITDA to a standard accounting measure and whether the presentation is potentially misleading.
• Decision taken: The company improves disclosure by clearly reconciling reported results to adjusted EBITDA and explaining each adjustment.
• Result: Investor understanding improves and disclosure risk falls.
• Lesson learned: EBITDA-based metrics require transparency, especially in public markets.

E. Advanced professional scenario

• Background: A private equity firm is buying a business using substantial debt.
• Problem: The lenders want to know whether the target can support the proposed capital structure under downside scenarios.
• Application of the term: Credit teams model reported EBITDA, adjusted covenant EBITDA, Debt/EBITDA, and EBITDA interest coverage under base, downside, and severe stress cases.
• Decision taken: The lenders reduce allowable leverage and require tighter covenant definitions.
• Result: The financing structure becomes more conservative but more resilient.
• Lesson learned: In advanced finance, the exact definition of EBITDA can change the whole risk picture.

10. Worked Examples

10.1 Simple conceptual example

Two companies each generate revenue of 100.

• Company A
• Higher debt
• Higher interest expense

• Same operations as Company B

• Company B

• Lower debt
• Lower interest expense
• Same operating performance

If both companies produce EBITDA of 20, their operations may be equally strong, even if Company A reports lower net income because of interest costs.

Point: EBITDA helps separate operating performance from financing structure.

10.2 Practical business example

A retail chain has two stores:

Store	Revenue	EBITDA	EBITDA Margin
Store X	50,00,000	7,50,000	15%
Store Y	50,00,000	5,00,000	10%

Both stores have the same revenue, but Store X converts more sales into EBITDA.

Interpretation: – Store X may have better labor scheduling, lower rent, stronger pricing, or lower wastage. – Management should investigate why Store Y is less efficient.

10.3 Numerical example

Suppose a company reports the following annual figures:

• Revenue: 12,000,000
• Cost of goods sold: 7,200,000
• Selling and admin expenses excluding D&A: 2,100,000
• Depreciation: 300,000
• Amortization: 100,000
• Interest expense: 450,000
• Total debt: 8,100,000
• Cash: 1,200,000

Step 1: Calculate EBIT

[ EBIT = Revenue – COGS – Operating\ Expenses – Depreciation – Amortization ]

[ EBIT = 12,000,000 – 7,200,000 – 2,100,000 – 300,000 – 100,000 ]

[ EBIT = 2,300,000 ]

Step 2: Calculate EBITDA

[ EBITDA = EBIT + Depreciation + Amortization ]

[ EBITDA = 2,300,000 + 300,000 + 100,000 = 2,700,000 ]

Step 3: Calculate EBITDA margin

[ EBITDA\ Margin = \frac{2,700,000}{12,000,000} \times 100 = 22.5\% ]

Step 4: Calculate Debt/EBITDA

[ Debt/EBITDA = \frac{8,100,000}{2,700,000} = 3.0x ]

Step 5: Calculate Net Debt/EBITDA

[ Net\ Debt = 8,100,000 – 1,200,000 = 6,900,000 ]

[ Net\ Debt/EBITDA = \frac{6,900,000}{2,700,000} \approx 2.56x ]

Step 6: Calculate EBITDA interest coverage

[ EBITDA/Interest = \frac{2,700,000}{450,000} = 6.0x ]

Interpretation: – Profitability looks healthy at 22.5% EBITDA margin – Leverage is moderate to elevated depending on industry – Interest coverage at 6.0x suggests the company can currently service interest comfortably

10.4 Advanced example: adjusted covenant EBITDA

Continuing the same example, suppose the loan agreement allows the company to add back:

• one-time restructuring cost: 200,000
• non-cash impairment: 400,000

Then:

[ Adjusted\ Covenant\ EBITDA = 2,700,000 + 200,000 + 400,000 = 3,300,000 ]

Now leverage becomes:

[ Debt/Adjusted\ EBITDA = \frac{8,100,000}{3,300,000} \approx 2.45x ]

Why this matters: Reported leverage looks like 3.0x, but covenant leverage looks like 2.45x.

Caution: If “one-time” adjustments keep repeating, the adjusted number may be too optimistic.

11. Formula / Model / Methodology

There is no single universal EBITDA Ratio formula because the term is used in different ways. The most common EBITDA-based formulas are shown below.

Formula Name	Formula	Meaning
EBITDA	EBIT + Depreciation + Amortization	Operating earnings before interest, tax, D&A
EBITDA Margin	EBITDA / Revenue × 100	Profitability from sales
Debt/EBITDA	Total Debt / EBITDA	Leverage relative to earnings
Net Debt/EBITDA	(Total Debt – Cash) / EBITDA	Leverage after considering cash
EBITDA Interest Coverage	EBITDA / Interest Expense	Ability to pay interest from operating earnings
EV/EBITDA	Enterprise Value / EBITDA	Valuation multiple relative to operating earnings

Meaning of each variable

• EBITDA: Earnings before interest, taxes, depreciation, and amortization
• Revenue: Sales or operating income from customers
• Total Debt: Short-term plus long-term borrowings
• Cash: Cash and cash equivalents, if using net debt
• Interest Expense: Finance cost on borrowings
• Enterprise Value: Equity value + debt – cash, subject to standard valuation adjustments

Interpretation

EBITDA Margin

• Higher usually means better operating efficiency or stronger pricing power
• Best used within the same industry

Debt/EBITDA

• Lower usually means less leverage risk
• Widely used in credit analysis

Net Debt/EBITDA

• More refined than Debt/EBITDA because cash is considered
• Useful when cash balances are material

EBITDA/Interest

• Higher usually means better debt-service ability
• Useful for lenders and bond investors

EV/EBITDA

• Used for valuation, not operating performance alone
• Compare with peer companies and growth outlook

Sample calculation

Assume:

• Revenue = 50
• EBITDA = 10
• Debt = 25
• Cash = 5
• Interest = 2
• Enterprise Value = 80

Then:

• EBITDA Margin = 10 / 50 = 20%
• Debt/EBITDA = 25 / 10 = 2.5x
• Net Debt/EBITDA = (25 – 5) / 10 = 2.0x
• EBITDA/Interest = 10 / 2 = 5.0x
• EV/EBITDA = 80 / 10 = 8.0x

Common mistakes

• Using quarterly EBITDA against full-year debt without annualizing or using TTM
• Comparing adjusted EBITDA of one company with reported EBITDA of another
• Treating EBITDA margin and Debt/EBITDA as if “higher is always better”
• Ignoring whether the business is capital-intensive
• Forgetting that negative EBITDA makes leverage ratios hard to interpret
• Using stale EBITDA in rapidly changing industries

Limitations

• EBITDA is not cash flow
• It ignores capital expenditure
• It ignores working capital needs
• It excludes interest and taxes, which are real obligations
• It can be manipulated through aggressive adjustments
• It is less meaningful in sectors where interest is an operating item

12. Algorithms / Analytical Patterns / Decision Logic

EBITDA Ratio is not an algorithm by itself, but it is often part of structured analytical frameworks.

Analytical Pattern	What it is	Why it matters	When to use it	Limitations
TTM trend analysis	Track EBITDA margin or leverage over trailing 12 months	Smooths seasonality and one-off quarterly noise	Seasonal or cyclical businesses	May still hide recent sharp deterioration
Peer screening logic	Screen for positive EBITDA, stable margin, and acceptable leverage	Fast way to shortlist firms	Equity research, lending, PE screening	Can miss qualitative issues
Covenant headroom analysis	Compare actual leverage to covenant limits	Shows refinancing or default risk early	Credit monitoring	Depends on exact contract definitions
Quality-of-earnings cross-check	Compare EBITDA with cash flow from operations	Tests whether earnings convert into cash	Due diligence, deep analysis	Working capital swings can distort short periods
Margin bridge / variance analysis	Break margin change into price, volume, mix, and cost effects	Helps management take action	Budget review and operations control	Requires detailed internal data
Valuation matrix	Combine EBITDA margin, EV/EBITDA, and growth	Distinguishes cheap vs high-quality firms	Public market investing, M&A	Growth and capex can change interpretation

A simple screening logic example

An analyst might use the following decision flow:

1. Start with companies that have positive TTM EBITDA
2. Check whether EBITDA margin is stable or improving
3. Exclude companies with very high Net Debt/EBITDA for the sector
4. Compare cash flow from operations to EBITDA
5. Compare EV/EBITDA against peers
6. Review whether adjustments are reasonable

When this matters most

This structured use of EBITDA ratios is especially useful in:

• private equity
• credit underwriting
• stock screening
• turnaround investing
• portfolio risk reviews

13. Regulatory / Government / Policy Context

EBITDA and EBITDA ratios are heavily used in practice, but they are not fully standardized by accounting law in the same way as revenue or net income. That makes the regulatory context important.

Global accounting point

Under major accounting systems, EBITDA is usually not a required standard line item in the primary financial statements. Companies often present it as:

• a supplemental performance measure
• a management metric
• an alternative performance measure
• a non-GAAP measure

Because of that, definitions and adjustments must be read carefully.

United States

In the US:

– EBITDA and adjusted EBITDA are generally treated as non-GAAP financial measures