Are you curious to learn the difference between operating profit and EBITDA? 🤔
Let's get started!
💡 Operating profit is the amount of money a company earns after subtracting operating expenses from total revenue 💸.
💡EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) = money a company earns before subtracting taxes, interest, and other non-operating expenses 💰.
Think of it like this: Operating profit is like your paycheck after taxes, while EBITDA is like your paycheck before taxes. 🤑
Except companies also have other economy-based fees like interest, depreciation, and amortization on top of taxes! 🙈
If a company earns $100 in total revenue and has $30 in operating expenses, its operating profit is $70. 💪
On the other hand, if that same company spends $20 on non-operating expenses, like taxes, their EBITDA would be $80. 🧮
It's important to note that operating profit and EBITDA are both used in different situations. 🤑
Operating profit is used to measure the profitability of a company's core operations. 📊
EBITDA is used to measure a company's ability to generate cash flow and to compare the performance of different companies. 💵
Now you know that Operating Profit gives the full picture, while ETBIDA is just profit before things like taxes 🥳
Use both of these investment stats as you explore more stocks! 💰
