07/08/2026
EBITDA.
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization.
Sounds fancy. It's really just this:
Start with your profit , the money left after everything's paid.
Then add four things back, one at a time, because none of them are really about how well you run jobs:
Interest — what you pay the bank for borrowing. That's your loan, not your labor.
Taxes — what you owe the government. That's the tax code, not the crew.
Depreciation — spreading the cost of your trucks and equipment across the years you use them, a slice each year.
Amortization — same idea, but for things you can't touch, like a patent or the goodwill from buying out a competitor.
Add those four back to your profit, and there's your EBITDA.
Why does anyone care? Because it lets a buyer or a banker compare your shop to the one down the road without getting tangled up in who's carrying a bigger loan or a fancier tax setup. It's really just asking one thing: how good is the actual work at making money?
What's one accounting term you wish someone had explained to you in plain English years ago?