The Capstone M&A Term of the Week is EBITDA.

Week of 3/24/2024 - 3/30/2024

What Is EBITDA?

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a mouthful, but fear not—we'll break it down step by step:

1. Earnings: This refers to the company's net income or profit after all expenses.

2. Before Interest: We exclude interest expenses (the cost of borrowing money).

3. Before Taxes: Tax payments are also left out.

4. Before Depreciation: Depreciation accounts for the wear and tear on assets (like machinery or buildings) over time.

5. Before Amortization: Amortization deals with intangible assets (such as patents or trademarks) and their gradual write-off.

The Capstone M&A Term of the Week aims to enhance your understanding of mergers and acquisitions (M&A) terminology. Each week, we will spotlight a specific M&A-related word or phrase, breaking it down into simple, digestible explanations.