Earnings before Interest, Taxes and Amortization
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Earnings before Interest, Taxes and Amortization (EBITA) refers to a company's earnings before the deduction of interest, taxes and amortization expenses. See EBITDA. It is a financial indicator used widely as a measure of efficiency and profitability. EBITA margins in developing telecom markets can be as high as 60%, but margins vary greatly across industries and over time.
EBITA margin can be calculated by taking the Profit Before Taxation (PBT/EBT) figure as shown on the Consolidated Income Statement, and adding back Net Interest and Amortization. Often, Amortization charges are zero and therefore EBIT = EBITA.
EBITA has more recently been cited by bayside investors as a useful metric to be used as a replacement for, or in conjunction with, EBITDA multiples, as corporations continue to present increasing levels of intangible-based amortization.
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