What would an EBITDA ratio show you?

What would an EBITDA ratio show you?
A . how profitable a business is
B . how solvent a business is
C . how much of a business’s funding is made up of long term debt
D . how effectively a business uses its assets to generate sales

View Answer

Answer: A

Explanation:

EBITDA stands for ‘earnings before interest, tax, depreciation and amortization’. This is a profitability ratio and would show how profitable a business is.

EBITDA: Definition, Calculation Formulas, History, and Criticisms (investopedia.com)