Amortisation
AccountingSpreading the cost of an intangible asset across its useful life.
In plain terms
The intangible equivalent of depreciation. Goodwill is the exception — it is not amortised.
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Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Amortisation schedule
Market basicsThe instalment-by-instalment split of a loan repayment between interest and principal across its full tenure.
In plain terms
Early instalments are almost all interest because interest is charged on the outstanding balance. Restarting the tenure puts you back at the interest-heavy end.
EBITDA
AccountingEarnings before interest, tax, depreciation and amortisation.
In plain terms
Munger’s test: try reading it as "earnings before the bad stuff" and see if the argument holds.
EV/EBITDA
Fundamental analysisEnterprise value divided by earnings before interest, tax, depreciation and amortisation.
In plain terms
The only common multiple that accounts for debt. Use it whenever leverage differs.
Finance cost
AccountingThe profit and loss account line containing interest on borrowings together with interest on lease liabilities, unwinding of discount on provisions and amortisation of transaction costs.
In plain terms
A container rather than a single item, and it excludes interest capitalised into an asset under construction. Dividing it by borrowings without reading its note gives a rate the company was never offered.