EBITDA is short for Earnings Before Interest, Taxes, Depreciation, and Amortisation. It is a common financial metric in eCommerce used to evaluate a company’s financial performance.
EBITDA measures a company’s operating profitability, as it reflects the earnings before certain expenses like interest, taxes, depreciation, and amortisation are deducted. By calculating EBITDA, eCommerce businesses can get a clearer picture of their financial health and get a more strategic approach to decision-making about investments, acquisitions, and other business activities. It is a useful metric for eCommerce companies since it allows for easier comparisons between companies with different capital structures, tax liabilities, and other factors that can affect net income.