What Is EBITDA? EBITDA is the acronym for earnings before interest, taxes, depreciation, and amortization. As its name implies, it is income before interest ...

To calculate EBITDA, you start with net income, then add back interest, taxes, depreciation, and amortization. This gives a clearer picture of earnings from operations.

EBITDA is a metric commonly used to estimate the value of a company. Here’s how to calculate EBITDA and when to use it.

Divide the company's EBITDA by its sales to calculate the EBITDA margin. In this example, divide $100,000 by $350,000 to get 0.2857. Multiple the EBITDA margin by 100 to convert it to a percentage.

Most business owners have heard of EBITDA, (Earnings Before Interest, Taxes, Depreciation, Amortization), but don’t fully understand how it can affect the value of a company and the price buyers ...

EV/EBITDA is a valuation ratio that compares the total valuation of a company to EBITDA. This is a widely used as a valuation tool. Click to learn more.

For example, assume a company reports an EBITDA of $2 million and total revenue of $10 million. The EBITDA margin would be ($2 million / $10 million) × 100, resulting in a margin of 20%.

Get your merger right By using EBITDA calculation as a merger and acquisition strategy, you can see how a potential merger or acquisition will affect your company’s overall profitability.

There’s no question that EBITDA is helpful in offering better insight into a company’s finances. Still, it’s imperative to remember that this metric must always be taken with a grain of salt.

EBITDA is often used and confused as an approximation of operating cash flow. Many business professionals (CPAs, business owners, bankers, attorneys and others) struggle to understand the differences ...