What is EBITDA? What is left out of it?
4 years ago
Financial Management
By asking this question, the recruiter wants to see what in-depth industry knowledge you have about EBITDA. You can frame your answer using the following:
EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It is a measure of a company’s overall financial performance. EBITDA can be misleading because it does not include the cost of capital investments like property, equity, plant, and equipment.
EBITDA Formula and Calculation:
The two EBITDA formulas are:
#Method 1:
EBITDA=Net Income+Interest+Taxes+D+A
where:
D=Depreciation
A=Amortization
#Method 2:
EBITDA=Operating Profit+DE+AE
where:
DE=Depreciation expense
AE=Amortization expense
Sanisha Maharjan
Jan 18, 2022