In modern corporate finance, accurately evaluating company performance is essential for stakeholders, including investors, analysts, and management. Amidst the array of financial indicators available, Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) has emerged as a widely utilized metric due to its ability to provide a clearer view of operational profitability by excluding non-operational and non-cash items. From a broader perspective, financial analysis traditionally encompasses metrics such as net income, return on equity, and cash flow. However, these measures can be significantly influenced by accounting treatments, capital structure, and tax environments, often complicating inter-company and cross-industry comparisons. EBITDA addresses this challenge by isolating operating performance, allowing analysts to assess a company’s core earnings capacity before financial and accounting distortions. This metric is especially valuable in mergers and acquisitions, leveraged buyouts, and credit analysis, where operational strength and debt service capabilities are central considerations. Nevertheless, while EBITDA offers practical benefits, it also presents limitations—particularly in industries with significant capital expenditure requirements or those where depreciation reflects true asset wear and tear. Overreliance on EBITDA without context can mask cash flow issues, understate capital intensity, or overestimate valuation multiples. This article critically evaluates the function of EBITDA within the broader financial performance framework, exploring its strengths, contextual relevance, and interpretive boundaries. By analyzing case applications and comparing EBITDA with complementary indicators, the discussion emphasizes the need for balanced metric interpretation in assessing corporate health.