Earnings before interest, taxes, and depreciation

Accounting
Historical cost Constant purchasing power Management Tax
Major types Auditing Cost Forensic Financial Fund Governmental Management Social Tax
Key concepts Accounting period Accrual Constant purchasing power Economic entity Fair value Going concern Historical cost Matching principle Materiality Revenue recognition Unit of account
Selected accounts Assets Cash Cost of goods sold Depreciation / Amortization Equity Expenses Goodwill Liabilities Profit Revenue
Accounting standards Generally-accepted principles Generally-accepted auditing standards Convergence International Financial Reporting Standards International Standards on Auditing Management Accounting Principles
Financial statements Annual report Balance sheet Cash-flow Equity Income Management discussion Notes to the financial statements
Bookkeeping Bank reconciliation Debits and credits Double-entry system FIFO and LIFO Journal Ledger / General ledger T accounts Trial balance
Auditing Financial Internal Firms Report
People and organizations Accountants Accounting organizations Luca Pacioli
Development History Research Positive accounting Sarbanes–Oxley Act
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Earnings before interest, taxes, and depreciation (EBITD or EBDIT), sometimes called profit before depreciation, interest, and taxes (PBDIT), is an accounting metric.^[1] Some people find it useful to know this value for a business. On the other hand, some businesses may emphasize this value in publicity or reports to investors, instead of the GAAP or other standard earnings or income value.

In finance, EBITD is sometimes used in capital budgeting calculations as a starting point in order to create templates that can be easily changed to observe the effects of changing variables (such as tax rates, allowances for inflation or changes in depreciation methods) on a net present value (NPV) or internal rate of return (IRR) value, and thus, the viability of a potential investment or project.^[2]

See also

• Earnings before interest and taxes (EBIT)
• Earnings before interest, taxes, and amortization (EBITA)
• Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR)
• Earnings before interest, taxes, depreciation, and amortization (EBITDA)
• EV/EBITDA
• Operating income before depreciation and amortization (OIBDA)

References