EBITDA stands for Earnings Before Interest, Tax, Depreciation, and Amortisation. It is a measure of operating profitability that strips out the effects of capital structure (interest), tax position (tax), and accounting policies (depreciation, amortisation), allowing comparisons across businesses with different financing and asset bases.
EBITDA is the most common base figure for valuation multiples in Australian sub-$20M business sales. The reliability of an EBITDA figure depends entirely on the integrity and defensibility of the calculations underlying it.