what is operating income before depreciation and amortization oibda 
operating income before depreciation and amortization oibda is a measure of financial performance used by companies to show profitability in their core business activities oibda excludes the effects of capital spending on fixed assets such as equipment and the interest expense of carrying debt sometimes oibda may not include changes in accounting principles that are not indicative of core operating results income from discontinued operations and the earnings and losses of subsidiaries understanding operating income before depreciation and amortization oibda operating income before depreciation and amortization oibda attempts to show how much income a company is earning for its core business by analyzing a company s oibda we can see how well a company generates revenue from sales while managing its production and operating expenses oibda is a non gaap financial measure meaning it s not a regulatory requirement when companies report their financial statements regulatory agencies such as the securities and exchange commission sec mandate that companies report their financial performance in a standardized format to help investors and creditors compare companies more effectively however oibda is still a useful metric since it can help investors understand how well a company generates income from its core production and manufacturing business below are the components that are often used in calculating oibda operating income is the income that a company earns from its core business operating income is the result of subtracting operating expenses from gross profit gross profit is a company s revenue minus its cost of goods sold cogs cost of goods sold represents the cost of inventory and supplies needed to produce the goods being sold that generate revenue while gross profit shows how much profit a company earns from its production line operating income is more inclusive operating income includes operating expenses for running the company in addition to cogs 