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Answers to Frequently Asked Questions
Earnings before interest, taxes, depreciation, and amortisation, or EBITDA, is an alternative metric to net income for determining profitability. EBITDA aims to represent the cash profit produced by the company’s activities by eliminating non-cash depreciation and amortisation expense, taxes, and debt charges based on the capital structure.
To determine a company’s EBITDA, you can utilise this EBITDA calculation formula:
EBITDA = Net Income + Interest + Taxes + Depreciation + Amortization
Regardless of the depreciation assumptions or financing strategies utilised by the companies, EBITDA can be used to track and compare the underlying profitability of those companies.
EBITDA calculator includes multiple external financial aspects such as:
EBITDA = Net Income + Taxes + Interest Expense + Depreciation & Amortization.
By reimbursing earnings with taxes and interest, the EBITDA calculator excludes the cost of debt. It can be used to cover up poor decisions and financial problems. You might not be able to obtain a loan for your company if you use EBITDA. Loans are computed based on the actual financial performance of the organisation.