Earnings Before Interest, Depreciation And Amortization - EBIDA
A measure of the earnings of a company that adds the interest expense, depreciation and amortization back to the net income number, but takes into consideration the tax expense. This measure is not as well known or used as often as its counterpart EBITDA.
Investopedia Commentary
EBIDA is considered to be a more conservative valuation measure than EBIDTA as EBIDA includes the tax expense in the earnings measure. The reason EBIDTA adds back the tax expense is that the money used to pay for taxes can be used to pay down debts. This can be done when the company has interest payments. Interest payments are tax deductible, which, in turn, may lower the company's tax expense, giving it more money to service its debt. EBIDA, however, does not make the assumption that the tax expense can be lowered through interest expense, and therefore does not add it back to net income.
Related Links
EBITDA: The Good, The Bad, And The Ugly
Relative Valuation: Don't Get Trapped
See also: Amortization, Depreciation, Earnings Before Interest & Tax - EBIT, Earnings Before Tax - EBT, EBITDA, Income Tax, Net Income - NI
Also spelled: EBIDA