Answers the Question
How profitable is a company, all things considered?
Calculator for EBITDA
What Is the EBITDA?
EBITDA (earnings before interest, taxes, depreciation, and amortization) looks at the basic earnings for a firm's operations.
Why Is it Important?
- EBITDA presents an excellent window into the profitability of a firm.
Formula(s) to Calculate EBITDA
- EBITDA = OPERATING REVENUE - OPERATING EXPENSES + NON OPERATING INCOME TAXES + DEPRECIATION + AMORTIZATION
- Not being consistent with the method used for valuing inventory management (FIFO, LIFO, etc).
- Not considering the effects of interest and taxes as part of a more holistic analysis.