EBITDA
Plain-English definition of EBITDA and why it is not the same as cash.
What EBITDA means
EBITDA means earnings before interest, tax, depreciation and amortisation. For small-business owners, it is often used as a rough operating-profit signal, but it still needs context because cash flow, owner wages, debt, assets and risk can change the planning value.
Why it matters
It helps compare operating performance, but it does not replace cash-flow or risk analysis.
An example
A business with $120,000 EBITDA may still be risky if all customers rely on the owner or cash is tied up in overdue invoices.