What financial metric excludes capital expenditures and focuses on operating profitability?

The correct choice is EBITDA, which stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. This metric is designed to measure a company's overall operating performance by focusing solely on its core profitability from operations, excluding the effects of capital expenditures (capex), interest expenses, taxes, and non-cash accounting entries like depreciation and amortization.

By removing these factors, EBITDA provides a clearer view of how well a company is generating earnings from its core business activities. This is particularly useful for investors and analysts because it allows for better comparisons between companies within the same industry, regardless of their capital structure or tax situation.

In contrast, net income includes all expenses, including capital expenditures and non-operational items, making it a less pure indicator of operating profitability. Free Cash Flow considers capital expenditures, which means it does not fit the criteria of excluding them. Operating Cash Flow, while focused on cash generated from operations, can also be influenced by changes in working capital and includes expenses not necessarily related to core operations, which can skew the understanding of pure operational performance compared to EBITDA.