Wednesday, February 16, 2011
EBIT, EBITD, and EBITDA
Like the language of medicine, the language of business is full of funny acronyms. One of those acronyms is TIE = Times Interest Earned. The TIE ratio is measured by taking the EBIT/interest. Now, let's review EBIT:
EBIT (ebbit) = Earnings Before Interest and Taxes
EBITD (ebbit-dee) = Earnings Before Interest and Taxes and Depreciation
EBITDA (ebbit-dah) = Earnings Before Interest and Taxes and Depreciation and Amortization
Amused? If you want to speak with business executives about financial issues, you need to get familiar with the language.
I am currently a business school student in the Pharmaceutical and Healthcare Executive MBA program at Saint Joseph's University Erivan K. Haub School of Business in Philadelphia, PA. The Nationally-ranked and AACSB-accredited Haub School of Business, centrally located in the mid-Atlantic pharmaceutical and healthcare corridor, is able to bring together industry experts and a world-class faculty for a unique industry-focused, immersive executive program.
You can read about my business school experience by reading all the blog posts tagged "Business School Blog."