EBITDA (Definition) | Formula | Calculation with Example

In this video on EBITDA, here we discuss the definition of EBITDA (Earnings Before Interest Taxes Depreciation and Amortization) along with top 2 formula used to calculate ebitda along with its example.

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EBITDA is basically a measure of earnings before paying interest and taxes and is generally used as a measure of firm operating performance by adding depreciation and amortization.

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Formula #1

EBITDA = Operating Profit + Depreciation Expense + Amortization Expense

Formula #2

EBITDA = Net Profit + Interest + Taxes + Depreciation + Amortization

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Now let's suppose that a company's operating profit is $16,000,000, depreciation costs $700,000 and amortization expenses $550,000. Calculate EBITDA ?

EBITDA can be calculated using above formula as,

EBITDA = $16,000,000 + $700,000 + $550,000 = $17,250,000

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Assume that if a company has a net profit of $30,000,000 and taxes of $4,000,000 and interest payments of $2,000,000, with depreciation and amortization as previously indicated.

EBITDA can be calculated using above formula as,

$30,000,000 + $4,000,000 + $2,000,000 + $600,000 + $450,000 = $37,050,000

To know more about ?????? , you can go to this ???? ????:- https://www.wallstreetmojo.com/ebitda/

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