EBIT is not something a frog says, well it is but that is not what this post is about LOL.
Now, if your accountant takes care of all your finances and you don't know what this term means and you are a business owner and this is exactly for you.
EBITDA stands for Earnings Before Income Tax, Depreciation, and Amortization.
So let's break this down.
One of my number one jobs when I'm working with my clients is to make their accountants job as hard as possible by helping them to make as much money as possible. So that the accountant has a real challenge in trying to minimize the taxes. Not that there's anything wrong with paying taxes, but as Kerry Packer once said, we shouldn't be paying more than we have to because they're not really good at using it well.
So the E-B-I-T, Ebit stands for Earnings Before Income Tax.
And what this basically means is the DA, Depreciation and Amortization is that EBIT is before your accountant gets to your books.
So it's before they do all the black magic stuff and do depreciation and write down things and write off things and all the rest of it.
So, that's what EBITDA stands for and you really want to make sure that you are making your accounts job as hard as possible by making as much money as you possibly can.
So there you have it.
That's what EBITDA means.
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