Calculate EBITDA

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's operational performance and is used as an alternative to net income or simple earnings. EBITDA is calculated by adding back non-cash expenses of depreciation and amortization to the operating income.

EBITDA provides insight into the operational profitability of a company without the influence of tax and financing factors and accounting methods. This makes it a useful metric for comparing performance across different companies and industries.

While EBITDA can be a useful metric, it does not reveal cash flow or the actual profitability of a company. EBITDA omits the costs of capital expenditures, interest, and taxes, which can lead to a skewed view of actual financial health.

Like any financial metric, EBITDA can be manipulated by reclassifying certain items or through different interpretations of what constitutes operational costs. It is important to consider other financial measures in addition to EBITDA to get a complete picture of a company's financial health.