Pretty much all discussions with lenders, investors and potential strategic partners will include a healthy chat regarding a company's EBITDA. For those lucky enough to have avoided this topic to date, EBITDA is a holy term in the finance community defined as "Earnings Before Interest, Taxes, Depreciation and Amortization". Fundamentally it is an attempt to capture the "cash flow generating profile" of the entity. It focuses on earnings before Interest because companies can choose to have lots of debt or no debt - best to look at cash flow before interest or capital structure costs. It looks at cash flow before Taxes because some companies pay high taxes and others enjoy tax shields / carryforwards so its best to look at cash flow before all this nonsense. Finally, it is calculated before Depreciation and Amortization because these are non-cash expenses anyways. Keep in mind, EBITDA is only an imperfect proxy for operating cash flow... companies pay cash interest and cash taxes after all, invest in Capital Expenditures (not on the income statement), some operating expenses included in EBITDA are non-recurring and unusual. These factors give rise to other / complementary analyses such as "Adjusted EBITDA", "Free Cash Flow", and a deeper dive into the most holy of financial statements - The Cash Flow Statement. More on that soon..