EBITDA = Net profit + Interest + Taxes + Depreciation + Amortisation
EBITDA is operating profit before interest, taxes, depreciation and amortisation. It measures what the business activity generates without the effect of how it is financed, how it is taxed or how it spreads its investments in the accounts.
How it is calculated
EBITDA = Net profit + Interest + Taxes + Depreciation + Amortisation. Equivalently: Revenue − Cost of sales − Operating expenses (excluding depreciation and amortisation). EBITDA margin is EBITDA ÷ Revenue.
Example with numbers
Revenue 2,000,000; cost of sales 800,000; personnel and overhead 900,000; depreciation 100,000; interest 40,000; taxes 40,000. Net profit: 120,000. EBITDA: 120,000 + 40,000 + 40,000 + 100,000 = 300,000 (15% margin).
How Fibady does it
The group P&L is built with unlimited levels, so EBITDA is a subtotal defined once on the group chart of accounts and calculated per entity, subgroup and consolidated. Every figure opens down to the entry in the source ERP.