What is EBITDA and why does it matter?

The acronym EBITDA stands for earnings before interest, taxes, depreciation, and amortization. EBITDA is a useful metric for understanding a business's ability to generate cash flow for its owners and for judging a company's operating performance.

How to boost EBITDA?

How to improve your debt service coverage ratio. In addition to improving the EBITDA-assets ratio, a business can also focus on eliminating debt and interest expenses. One effective way of tackling the debt/interest side of this ratio is to cut expenses. “Sell things that can boost cash, such as unproductive assets,” advises Bierman.

What is funded debt to EBITDA ratio?

What Is Funded Debt to EBITDA Ratio? The funded debt to EBITDA ratio is calculated by looking at the funded debt and dividing it by the earnings before interest, taxes, depreciation and amortization. Funded debt is long-term debt financed debt, such as bonds, that comes due in a longer time period than a year.

Should payroll taxes be included in EBITDA?

Since EBITDA begins with Earnings, and Payroll Taxes are expensed in computing Earnings, then there should not be an add-back for Payroll Taxes.