scorecardresearchWhat is EBITDA: Is it the right way to measure a firm’s financial performance

What is EBITDA: Is it the right way to measure a firm’s financial performance

Updated: 15 Dec 2021, 12:50 PM IST
TL;DR.
A number of investors and analysts use EBITA to decide whether or not to buy a stock of a firm. However, is that the right way to decide? Let's find out the advantages and disadvantages of using EBITDA for such a decision.
EBITDA measures a firm's performance before external factors like taxes, interest, etc impact the profitability.

EBITDA measures a firm's performance before external factors like taxes, interest, etc impact the profitability.