What is EBIDTA in Profit and loss statement

What  is EBITDA

EBITDA is Earnings Before Interest Tax Depreciation & Amortisation. It is one of the very popular parameters to know about the performance of a company.

It can be used to compare the profitability of two or more companies. We can use this to determine which company is profitable and which is in loss. This information we can get from P&L statement.

Calculation

Ebitda can be calculated using below formula :

EBITDA = Operating Profit  + Depreciation Expense + Amortization Expense

Or

EBITDA = Net Profit  + Interest + Taxes + Depreciation Expense + Amortization Expense

It gives a good idea about the financial performance of a company and portrait of how much cash a young or restructured company may generate before paying its debts