What does EBITDA exclude in its calculations?

EBITDA, or Earnings Before Interest, Taxes, Depreciation, and Amortization, is a financial metric that provides insight into a company's operating performance. By excluding interest and tax expenses, EBITDA focuses on the efficiency of the company’s core operations and how well it can generate earnings from its business activities without the influence of external financial factors.

The exclusion of financing effects is particularly important because it allows for a clearer comparison between companies that may have different capital structures. This means that EBITDA removes the impact of how a company finances its operations (through debt or equity) and ensures that the focus remains on operational performance rather than financial and accounting practices.

Understanding this aspect is crucial when analyzing or comparing the performance of businesses within the same industry, as it helps distinguish operational efficiency from financial strategy. In contrast, the other options relate more directly to operational or revenue aspects of a company's performance rather than the financing structure.