What is ‘Earnings Before Interest, Tax, Amortization And Exceptional Items – EBITAE’
An accounting metric often used to deduct the amortization of intangible assets to arrive at a value. Companies will use EBITAE not only as a measure of performance, but also to determine interest coverage capabilities. The eliminated items are often seen as factors that distort earnings that are derived from the underlying business operations of a firm.
Explaining ‘Earnings Before Interest, Tax, Amortization And Exceptional Items – EBITAE’
When evaluating EBITAE, investors will look at the figure as a percentage of revenue and they will also measure EBITAE margin. Both the percentage and margin will be compared to previous years’ figures to evaluate performance. This ratio is very similar to the EBITDA, a very popular performance measure often used by investors.
Further Reading
- EBITDA, EBITA, or EBIT? – papers.ssrn.com [PDF]
- An economical evaluation of anaerobic digestion plants fed with organic agro-industrial waste – www.mdpi.com [PDF]
- DOES EBITDA ADEQUATELY MEASURE OPERATING CASH FLOW? – search.proquest.com [PDF]
- Firm size, employees and profitability in US manufacturing industries – papers.ssrn.com [PDF]
- Bank financing and corporate governance – www.sciencedirect.com [PDF]
