Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) Calculator Explained:
(a) What is this? This calculator indicates profit before interest, taxes, depreciation and amortisation in both $ and %.
(b) What does this tell it? Profit in both $ and %, note that this is BEFORE interest, taxes, depreciation or amortisation are included. A measure used to assess business performance as it reduces confusion around business value.
(c) Why should I use it? EBITDA is used to analyse profitability. Analysts use it to compare profitability between companies and industries. It is used as it eliminates the effects of accounting and financing decisions which can skew an earnings result.
(d) Caution: EBITDA is commonly quoted, but there is also discretion as to what goes into EBITDA. Seek the advice of your accountant when determining your EBITDA. You use this calculator at your risk.