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. 𝐖𝐡𝐚𝐭 𝐢𝐬 𝐄𝐁𝐈𝐓𝐃𝐀? --------------------------------- 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. 𝐄𝐁𝐈𝐓𝐃𝐀 𝐅𝐨𝐫𝐦𝐮𝐥𝐚 -------------------------------- Formula #1 EBITDA = Operating Profit + Depreciation Expense + Amortization Expense Formula #2 EBITDA = Net Profit + Interest + Taxes + Depreciation + Amortization 𝐄𝐁𝐈𝐓𝐃𝐀 𝐄𝐱𝐚𝐦𝐩𝐥𝐞 𝐮𝐬𝐢𝐧𝐠 𝐅𝐨𝐫𝐦𝐮𝐥𝐚 #𝟏 ----------------------------------------------------------------- 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 𝐄𝐁𝐈𝐓𝐃𝐀 𝐄𝐱𝐚𝐦𝐩𝐥𝐞 𝐮𝐬𝐢𝐧𝐠 𝐅𝐨𝐫𝐦𝐮𝐥𝐚 #𝟐 ----------------------------------------------------------------- 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 𝐄𝐁𝐈𝐓𝐃𝐀 , you can go to this 𝐥𝐢𝐧𝐤 𝐡𝐞𝐫𝐞:- https://www.wallstreetmojo.com/ebitda/ Subscribe to our channel to get new updated videos. Click the button above to subscribe or click on the link below to subscribe -    / @wallstreetmojo