What is the difference between EBITDA and EBIT?
The only difference between these two terms is that for EBITDA, you would add back depreciation and amortization since it’s a non-cash expense. In EBIT, you do not add back depreciation and amortization (they burden EBIT).
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How to calculate EBITDA?
EBITDA is a company’s net income but excludes the impact of interest income or expense related to debt instruments, depreciation and amortization, and stated and federal income taxes. The whole point of calculating EBITDA is to better understand a company’s GAAP cash flow. The reason we exclude depreciation and amortization is because it is not […]