Earnings measures · Question 9 of 12
How does EBITDA differ from EBIT?
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Answer
- B In EBITDA, depreciation and amortisation have not yet been deducted either
Explanation
EBITDA stands for earnings before interest, taxes, depreciation and amortisation. Compared with EBIT, depreciation and amortisation are therefore not deducted either, so EBITDA is at least as high as EBIT. It approximates operating cash inflow but ignores investment needs.