Profitability
EBITDA
Net income with tax, interest, depreciation and amortisation added back.
The Formula
EBITDA = NI + T + I + D + A
Net income with tax, interest, depreciation and amortisation added back.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| EBITDA | EBITDA | currency | Earnings before interest, tax, depreciation and amortisation. |
| NI | Net income | currency | Profit after every expense including tax and interest. |
| T | Tax | currency | Income tax charge for the period. |
| I | Interest | currency | Net interest expense on borrowings. |
| D | Depreciation | currency | Non-cash charge on tangible assets. |
| A | Amortisation | currency | Non-cash charge on intangibles. |
What Each Symbol Means
EBITDAcurrency
EBITDA
Earnings before interest, tax, depreciation and amortisation.
NIcurrency
Net income
Profit after every expense including tax and interest.
Tcurrency
Tax
Income tax charge for the period.
Icurrency
Interest
Net interest expense on borrowings.
Dcurrency
Depreciation
Non-cash charge on tangible assets.
Acurrency
Amortisation
Non-cash charge on intangibles.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate ebitda page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate EBITDA, filed under Business. Every number the guide produces comes from substituting into this one line.