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Clbull OP ,

Earnings before interest, taxation, deprecation and amortisation. Interest is classed as other income and taxation is kinda self-explanatory.

Depreciation is spreading the cost of a fixed asset over the course of its useful life. So let's say you spend $40,000 on a machine that you expect to keep for 20 years, and scrap for $1,000 at the end of its expected life. You depreciate it on the straight-line basis (meaning it goes down by a fixed amount each financial year, or depreciate it by $1,950 each year. Straight-line isn't the only form of depreciation. Cars for example go down on a reducing balance basis, meaning their value goes down by a lot more during the early years of their lifespan.

Amortisation is like depreciation, but for long term loans and intangible assets (things like customer lists, patents, etc.)

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