# EBITDA

> EBITDA is profit before interest, taxes, depreciation and amortisation: it measures what the business generates without financing or accounting effects.

Updated: 2026-09-03 · Author: Santiago Viglione (Fibady) · https://www.fibady.com/en/glossary/ebitda

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.

## Frequently asked questions

### Is EBITDA the same as cash flow?

No. EBITDA ignores working capital, investment and debt. A company with positive EBITDA can consume cash if it collects late or invests heavily.

### How often is it calculated?

Monthly with the management close, and year to date. Investors also look at the last twelve months (LTM).

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