Difference between EBIT and EBITDA. Which is a better performance metric?

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EBIT is earnings before interest and taxes, while EBITDA is earnings before interest, taxes, depreciation, and amortization. EBITDA is considered a better performance metric as it provides a clearer picture of a company's operating performance.

EBIT excludes depreciation and amortization expenses, while EBITDA includes them.
EBITDA is often used to analyze and compare the operating profitability of companies in the same industry.
EBITDA is considered a better performance metric as it provides a more comprehensive view of a company's financial health by excluding non-operating expenses.
For example, a company with high depreciation expenses may have a lower EBIT but a higher EBITDA, indicating better operational efficiency.

Difference between EBIT and EBITDA. Which is a better performance metric?

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