EBITDA Report Overview

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. An EBITDA report is a financial report that provides insights into a company’s operating performance by calculating its EBITDA. This metric is often used by businesses and investors to assess a company’s profitability and compare it with other companies, as it excludes the effects of financing and accounting decisions.

Components of an EBITDA Report: 

1. Earnings (Net Income): 
2. The starting point is usually the net income, which is the company’s total profit after all expenses, including interest and taxes, have been subtracted from total revenue. 
3. Interest: 
4. Add back any interest expenses. These are the costs of any debt the company has, which can vary significantly between companies and thus are excluded to provide a clearer picture of operational performance. 
5. Taxes: 
6. Add back any taxes. These can also vary due to different tax rates and laws, and removing them helps in comparing profitability between companies in different tax jurisdictions. 
7. Depreciation: 
8. Add back depreciation expenses. Depreciation is a non-cash expense that represents the reduction in value of assets over time. 
9. Amortization: 
10. Add back amortization expenses. Like depreciation, amortization is a non-cash expense, but it typically relates to intangible assets such as patents or goodwill. 

Following is the summary of the report headers used in this report :-

• Net Sales – Sum of all income account types
• Cost of Sales – Sum of all cost of goods sold account types
• Gross profit = Net Sales – Cost of Sales
• Selling, general and administrative expenses – Sum of all expense account types without ITDA accounts
• Depreciation & Amortization – Sum of depreciation & amortization accounts in expense account type.
• Operating Income = Gross Profit – Selling, general and administrative expenses – Depreciation & Amortization
• Interest – Sum of interest accounts in expense account type.
• Income before income tax expense = Operating Income – Interest
• Income Tax Expense – Sum of tax accounts in expense account type.
• Net Income = Income before income tax expense – Income Tax Expense
• Add Back Interest – Sum of interest accounts in expense account type.
• Add Back Income Taxes – Sum of tax accounts in expense account type.
• Add Back Depreciation & Amortization – Sum of depreciation & amortization accounts in expense account type.