EBITA vs EBIT and EBITDA

What is the meaning of EBIT, EBITA and EBITDA? Which companies use EBIT? Which companies use EBITA? Which companies use EBITDA? How do you calculate EBIT, EBITA and EBITDA? Let’s find out!

⏱️TIMESTAMPS⏱️
0:00 Introduction
0:19 EBIT vs Operating Income
0:39 Why companies report EBITA
1:16 Why companies report EBITDA
1:50 How EBIT, EBITA and EBITDA fit into the P&L
2:18 From net income to EBITDA
2:55 EBIT-EBITA-EBITDA calculation
3:40 EBIT-EBITA-EBITDA definition

Let’s walk through step by step how to get from net income to EBITDA. If you add back corporate income tax expense to net income, you get to EBT: Earnings Before Taxes. If you add back interest expense to EBT, you get to EBIT: Earnings Before Interest and Taxes. If you add back amortization expense to EBIT, you get to EBITA: Earnings Before Interest, Taxes and Amortization. If you add back depreciation to EBITA, you get to EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization.

Philip de Vroe (The Finance Storyteller) aims to make strategy, finance and leadership enjoyable and easier to understand. Learn the business vocabulary to join the conversation with your CEO at your company. Understand how financial statements work in order to make better stock market investment decisions. Philip delivers training in various formats: YouTube videos, classroom sessions, webinars, and business simulations. Connect with me through Linked In!

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