Finance and valuation
EBITDA
EBITDA stands for earnings before interest, taxes, depreciation and amortization. It is a measure of operating profit, before those costs, that buyers often use to compare businesses.
ADA News (March 2026) explains that EBITDA, or Earnings Before Interest, Taxes, Depreciation and Amortization, is a measure of profit before certain expenses. The same article adds that multiples show how buyers value that profit. EBITDA is not a measure defined by accounting rules for private practices, so each seller or buyer may calculate it differently. Because owner pay and one-time costs vary, advisers also use adjusted EBITDA. A buyer applies a valuation multiple to it. Check the definition used before comparing two figures, and ask a CPA to explain it.