Financial Glossary
EBITDA vs. Net Revenue
Net revenue is the top-line figure a business earns from sales after subtracting returns, allowances, and discounts. EBITDA (earnings before interest, taxes, depreciation, and amortization) is a profitability measure that strips out financing and accounting decisions to approximate operating cash earnings. The two sit at opposite ends of the income statement: net revenue is what comes in, while EBITDA is what is left after operating costs but before capital-structure and non-cash items.
Problem & Application
Operators sometimes conflate a strong revenue number with a healthy business, but a campground or STR portfolio can post rising net revenue while EBITDA shrinks under cleaning, utility, and payroll costs. Tracking both side by side shows whether growth is actually profitable or just busier. For owner-operated businesses evaluating a sale or loan, lenders and buyers usually anchor on EBITDA, not revenue, so understanding the gap between the two is critical.
In Short
Net revenue tells you how much you sold; EBITDA tells you how much of that selling turned into operating profit. Reading them together prevents revenue growth from masking margin erosion.