This is a formula that plays into how much you can expect someone to pay for your business in the future.

Code: E=Earnings, B=Before, I=Interest, T=Taxes, D=Depreciation and the A=Amortization.

EBITDA is a measure of cash profitability often applied to companies that have been subject to a leveraged buyout (LBO).

It's an acronym for "Earnings Before Interest, Taxes, Depreciation and Amortization".