answersLogoWhite
Math and Arithmetic
Business Accounting and Bookkeeping
Commercial Bank and Checking Accounts
Isaac Newton

How do you calculate EBIDTA?


Top Answer
User Avatar
Wiki User
Answered 2007-05-12 15:18:26

EBITDA «ee-bit-dah» is an acronym for Earnings Before Interest, Taxes, Depreciation, and Amortization. The same calculation can be arrived at from "operating income before depreciation and amortization" (OIBDA). It is one measure of 'operating cash flow'. It differs from the cash flow from operations found in the Statement of Cash Flow primarily by ignoring payments for taxes or interest. EBITDA does not add back many of the other non-cash operating expenses, like the Statement of Cash Flow does. EBITDA also differs from free cash flow because of the difference above, and also because it does not recognize the cash requirements for replacing capital assets. Although there are different points of view regarding the use of this metric by equity owners, most agree to its validity when used by debtholders, or to evaluate a business's ability to handle debt.

789
๐Ÿ™
0
๐Ÿคจ
0
๐Ÿ˜ฎ
0
๐Ÿ˜‚
0
User Avatar

Your Answer

Still Have Questions?

Related Questions

How does EBIDTA help to know the financial status of company?

ebidta indicates the cash generated from the operation of the company. this is crucial indicator because if the company is not generating cash FROM ITS OPERATION than the company survival is difficult


What is the difference between ffo and ebitda?

A very crude way of looking at the two is :EBIDTA (-) Interest (-) Tax = FFO.


How should EBIDTA be interpreted in stock investing?

EBIDTA is not commonly used when evaluating publicly traded companies, at least not by the vast majority of brokers or individual investors, and accordingly, EBIDTA is not commonlky used in "stock investing." EBIDTA (earnings before interest, depreciation, income taxes, and amortization) is typcially used when evaluating the value of private companies. This approach provides a common point of reference for comparing one company's earnings to another company's, even if they have different entity structures (C Corp, S Corp, Partnership, LLC), different capitalization structures (debt vs. equity), different depreciation attributes (some companies havefinancial statements that use GAAP depreciation, while others have tax returns that use aggressive tax depreciation and equipment expensing elections, and different amortization (one company amortizing intangible acquisition costs while another has no amortizable assets). Just as the common stock of public companies trade within certain P/E multiples, depending on their industry and many other factors, so too do private companies change hands for certain EBIDTA multiples. Small companies, for example, generally sell for 3 to 5 times EBIDTA. Larger ones can change hands for as much as twice those levels. Sometimes more. If you were to go through the trouble of calculating it, a public company's EBITDA will generally be a factor of 1 or 2 lower than it's P/E. That is, a public company whose stock is trading at a multiple of 12, for example, would most likely have an EBITDA multiple between 10 and 11. The reason for this should be obvious. The earnings in the P/E ratio are the company's earnings after deducting IDTA. Accordingly, when you divide a company's market capitalization by its earnings, you get a higher number than dividing the market cap by the higher EBITDA number.


How do you calculate WACC?

how to calculate WACC how to calculate WACC how to calculate WACC how to calculate WACC


How can you calculate tree density?

Weigh it, calculate its volume, then calculate density.


Calculate percentage recovery?

how to calculate percentage recovery? how to calculate percentage recovery?


How do you calculate pka?

how do you calculate pKa


What are some ways to compare 300 and 225?

calculate their ratiocalculate their differencecalculate the number of factorscalculate the number of prime factors.


How do you calculate the powerfactor?

how to calculate the powerfactor in capacitor


How do you say calculate in Spanish?

Calcular = to calculate


how to calculate percentages?

how do you calculate percentage of participation


How can the word ''calculate'' be used in a sentence?

I was told to calculate the zeroes for a complex polynomial.


What is 400 subtracted from 2000?

-1600


How do you calculate m2?

How do I calculate floor space of 600 sqare meters, and how do I calculate 600 cubic meters


How do you calculate the area of a pyrimid?

i am trying to calculate my loft space, also what shape is a toblerone box and how do you calculate that


How do you calculate a log with 9 diameter and 10' length?

You do not calculate a log!You can calculate the surface area or the volume or, if you know the species, the mass or even time for which it would burn in a hearth. But the log, itself, is not something you can calculate.You do not calculate a log!You can calculate the surface area or the volume or, if you know the species, the mass or even time for which it would burn in a hearth. But the log, itself, is not something you can calculate.You do not calculate a log!You can calculate the surface area or the volume or, if you know the species, the mass or even time for which it would burn in a hearth. But the log, itself, is not something you can calculate.You do not calculate a log!You can calculate the surface area or the volume or, if you know the species, the mass or even time for which it would burn in a hearth. But the log, itself, is not something you can calculate.


How do you calculate the diameter of a wire?

calculate the dia of strain. calculate no. of strain. now dia of wire=no. of strain*dia of strain calculate the dia of strain. calculate no. of strain. now dia of wire=no. of strain*dia of strain


How do you find time when velocity and an angle are given?

There is not enough information to calculate the time.There is not enough information to calculate the time.There is not enough information to calculate the time.There is not enough information to calculate the time.


Calculate the perimeter of 45.6m?

calculate the perimeter of 45.6m?


How do you calculate magnification on a microscope?

How do you calculate magnification on a microscope


How to calculate KVA?

how to calculate electrical power kVA?


How do you calculate a ratio from a percent?

Formula to calculate the ratio


How do you calculate field diameter?

How do you calculate field diameter?


How do you calculate IMA?

well you calculate the M with the I with the A and then you get your answer but its MXIXA


How do you calculate LD50?

how can i calculate the LD50 of pregabalin drug


Still have questions?