What is EBITDA, and why is it important?

What is EBITDA?

EBITDA stands for earnings before interest, taxes, depreciation, and amortization.  Put more simply, it is a gauge for outsiders to determine how much cash your business would generate if they bought it.  Most businesses sell for 4-6 times EBITDA.  Yes, EBITDA is very important.

If you are planning to sell your business someday, don’t shortchange yourself by understating your income or overstating your expenses in order to avoid income taxes.  Every time you do that, you stand to lose 4 to 6 times that amount when your business goes up for sale.

Let a B2B CFO® professional help you increase your EBITDA and answer the question: What is EBITDA? This way you will someday sell your business for its maximum value!

 

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