Because it allows comparison relatively independent of financing structure and accounting policies, EBITDA is widely used in valuations and loan agreements. As it is not a measure defined in TFRS, the calculation method should be stated clearly; applying TFRS 16 increases EBITDA.
In acquisitions, "adjusted EBITDA", stripped of unusual items, is used as the basis.
Related terms
Quality of earnings analysisEstablishing a company's sustainable profitability by stripping unusual, non-recurring and non-operating items out of reported profit.Net debtFinancial debt and similar liabilities less cash and cash equivalents.Multiples methodEstimating value using ratios of comparable companies' market values, or of prices paid in comparable transactions, to financial indicators.Leases (TFRS 16)The standard requiring lessees to present almost all leases in the statement of financial position as a right-of-use asset and a lease liability.Completion accountsFinancial statements prepared as at the closing date of an acquisition, through which the final price is set by net debt and working capital adjustments.Cost of capitalThe minimum rate of return investors expect from an investment in return for the risk they take.
Last updated: October 22, 2026 · This definition is for general information only.