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Financial statements
Also called: Earnings before interest, tax, depreciation and amortisation, Operating profit before depreciation
EBITDA is earnings before interest, tax, depreciation and amortisation: what the business earns from its operations before financing costs, taxes and the accounting charge for wear on its assets.
EBITDA = Net profit + Tax + Interest + Depreciation & amortisation (equivalently, Revenue − Operating expenses)
A company has revenue of ₹1,000 crore and operating expenses (raw material, staff, power, rent) of ₹800 crore. Its EBITDA is ₹200 crore and its EBITDA margin is 20%.
EBITDA leaves out depreciation, so it flatters businesses that must keep spending heavily on plant and equipment. Read it with free cash flow, which does subtract that spending.
In Indian results filings the closest line is usually 'operating profit' (sometimes labelled PBDIT), and the margin on it is the operating profit margin.
EBITDA is earnings before interest, tax, depreciation and amortisation: what the business earns from its operations before financing costs, taxes and the accounting charge for wear on its assets.
EBITDA = Net profit + Tax + Interest + Depreciation & amortisation (equivalently, Revenue − Operating expenses). A company has revenue of ₹1,000 crore and operating expenses (raw material, staff, power, rent) of ₹800 crore. Its EBITDA is ₹200 crore and its EBITDA margin is 20%.
No. EBITDA describes one aspect of a company, a price or a contract, and it is best read alongside other numbers and the business itself. Jivani Markets is a research and education platform; it does not give buy, sell or hold recommendations.