Part of: GS Prelims and GS-III – Infrastructure; Economy
In news
The State-owned undertakings Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL) have turned EBITDA positive in first 6 months of this financial year.
Key takeaways
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization.
EBITDA is a measure of profits.
It is a metric used to evaluate a company’s overall financial performance.
EBITDA is now commonly used to compare the financial health of companies and to evaluate firms with different tax rates and depreciation policies.
However, EBITDA is not a substitute for analysing a company’s cash flow and can make a company look like it has more money to make interest payments than it really does.
It also ignores the quality of a company’s earnings and can make it look cheaper than it really is.
