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How is EBITDA calculated?
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To calculate EBITDA, you need to start with a company's revenue and subtract its cost of goods sold.

Then, you subtract its operating expenses (like salaries and rent).

This gives you the company's EBITDA.

Example:

You make $20 selling lemonade, but you spent$5 on lemons, sugar, and cups.

You also spent $5 on flyers to advertise your lemonade stand. To calculate your EBITDA, you would start with the$20 you made selling lemonade, and subtract the $5 you spent on lemons, sugar, and cups. This leaves you with$15. Then, you would subtract the $5 you spent on advertising. This leaves you with an EBITDA of$10.
by Platinum (93,231 points)
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EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is calculated by adding a company's operating income to its depreciation and amortization expenses. The formula for calculating EBITDA is:EBITDA = Operating Income + Depreciation + AmortizationOperating Income = Revenue – Cost of Goods Sold – Operating ExpensesDepreciation and Amortization are non-cash expenses that represent the gradual reduction in the value of assets over time. EBITDA is a commonly used financial metric to evaluate a company's profitability and cash flow. It is often used by investors and analysts to compare the financial performance of different companies, as it provides a standardized measure of a company's operating profitability.
by Diamond (50,339 points)

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