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Earnings Before Interest Taxes Depreciation and Amortization (EBITDA)

EBITDA = Sales Revenues - (Operating Costs excluding Depreciation and Amortization)

EBITDA = EBIT + Depreciation and Amortization

A negative EBITDA is generally considered an indicator of problems with profitability and cash flow; a positive indicator should be looked at a neutral indicator. Because EBITDA is a non-GAAP measure, companies have discretion on what is included in the calculation, and as such its use in analysis should be guarded.