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Calculate your Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) using the simple EBITDA Calculator, you can also find information in our guide to EBITDA below the calculator.
Earnings Before Interest, Tax, Depreciation and Amortization, also known as EBITDA is a metric system to measure a company's profitability. This is generally used to compare a company's profitability over time or with other companies with different capital structures.
In other words, EBITDA is a measure of a company's financial performance without considering the company's tax environment, financial and accounting decisions. It is calculated by adding back non-cash expenses of amortization and depreciation to a firm's operating income.
EBITDA stands for Earnings before interest, tax, depreciation and amortization. This means the method gives you a figure of your firm's profit before:
The EBITDA calculator by iCalculator is designed to help you with these complex calculations. You will have to enter the below details for the calculation:
On the basis of your inputs the calculator will provide you with below results.
The EBITDA calculator is a simple tool for complex calculations. You may benefit in different ways:
There are a lot of disagreements about the usefulness of EBITDA. However, it is a widely used metric for the following reasons:
This method allows investors to focus on operating profitability due to the exclusion of interest, tax, depreciation and amortization. Due to this merit EBITDA is useful in comparing similar as well as different companies operating in different tax brackets.
The EBITDA method gives you a quick analysis of any firm's operating efficiency. This shows a company's baseline profitability thus making it a quite reliable method for new investors.
EBITDA is also used by investors considering a take over an existing business. Also, the businesses turn to EBITDA when they are making less profits as the metric provides a clear picture of profitability.
EBITDA is not regulated by GAAP. Investors are at the discretion of the company of what is and is not included in the calculation. This metric sometimes gets a bad reputation due to overexposure and improper use.
There are a few drawbacks to this method, majorly because it ignores:
To summarize the whole concept, EBITDA is a very useful tool to compare the profitability of a company but at the same time it should not be used as a standalone measure for this.
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