What is EBIDTA? And why is it important?

By asking this question, the recruiter wants to see what in-depth industry knowledge you have about EBITDA. You can frame your answer using the following: 

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It is a measure of a company’s overall financial performance. It can be misleading because it does not include the cost of capital investments like property, equity, plant, and equipment.

EBIDTA can be calculated by the below-given formula:

EBITDA=Net Income+Interest+Taxes+D+A

where:

D=Depreciation

A=Amortization