What’s the difference between operating income and EBITDA? (In terms of a software company if that makes any difference)

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SLIGHT clarification to the post above ^ - adjustments for non-recurring / one-off items gives you adjusted EBITDA, not reported EBITDA

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True true. Not often you look at reported EBITDA though.

In common usage if someone says EBITDA they’re most often referring to adj. EBITDA and just leaving off the word “adjusted” because they assume you know what they mean

Whatever there is to depreciate on the company is added back

Operating income = Ebit, so add depreciation to ebit to get ebitda

IBA1 is correct. Other thing is that EBITDA typically adds back other adjustments (one time items, exclusion of items that won’t recur in future etc)

Often operating income will be a straight GAAP figure, while EBITDA is almost always an adjusted number that is intended to show “ordinary course” profitability excluding unusual and non cash items.

EBITDA = Earning before interest depreciation and amortization.

Ebit= earnings before interest and tax = Operating income

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