Adjusted EBITDA is a normalized financial metric which excludes all one-time, irregular and non-recurring items. It is commonly used in valuation by financial analysts and professionals in corporate finance because it reflects the financial performance of a business without the impact of irregular gains, losses, or other transactions. While the calculation of adjusted EBITDA can vary largely by industry, below is a list of common items excluded from EBITDA to obtain the adjusted EBITDA:

  • Non-operating income
  • Unrealized gains or losses
  • Non-cash expenses
  • One-time gains or losses
  • Stock-based compensation
  • Litigation expenses
  • Goodwill impairments
  • Asset write-downs
  • Gains or losses on foreign exchanges
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