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Earnings Before Interest, Depreciation And Amortization (EBIDA)

Earnings Before Interest, Depreciation And Amortization (EBIDA)

What is 'Earnings Before Interest, Depreciation And Amortization - EBIDA'

Earnings before interest, depreciation and amortization (EBIDA) is a measure of the earnings of a company that adds the interest expense, depreciation and amortization back to the net income number, but takes the tax expense into consideration. This measure is not as well known or used as often as its counterpart, earnings before interest, taxes, depreciation and amortization (EBITDA).

Explaining 'Earnings Before Interest, Depreciation And Amortization - EBIDA'

EBIDA is considered to be a more conservative valuation measure than EBIDTA because it includes the tax expense in the earnings measure. The EBIDA measure removes the assumption that the money paid in taxes could be used to pay down debt, an assumption made in EBIDTA. This debt payment assumption is made because interest payments are tax deductible, which, in turn, may lower the company's tax expense, giving it more money to service its debt. EBIDA, however, does not make the assumption that the tax expense can be lowered through the interest expense and, therefore, does not add it back to net income.


Earnings Before Interest, Depreciation And Amortization (ebida) FAQ

Do you include depreciation in EBIT?

EBIT is a company's operating profit after removing interest expense and taxes. However, EBITDA or (earnings before interest, taxes, depreciation, and amortization) removes depreciation and amortization expenses from EBIT to calculate profits.

What is Ebitda and how is it calculated?

EBITDA is calculated by subtracting every other expense except interest, taxes, depreciation, and amortization from net income. It is often calculated inversely by starting with net income and adding back the ITDA. Many companies measure different aspects of their business with this.

What is a normal Ebitda margin?

EBITDA margin is a margin of profits reflecting how much revenue EBITDA relatively earns the company. Normal EBITDA margin may be from 10% to 50%, it depends on the industry. Businesses requiring lots of investments have higher EBITDA margin.

Is Ebitda bigger than EBIT?

EBITDA means Earnings Before Interest, Taxes, Depreciation and Amortization. The difference between EBITDA and EBIT lies in the last two letters of the acronym: Depreciation and Amortization. EBITDA is bigger than EBIT because it excludes more expense line items.

Is it good to have a high Ebitda?

A high EBITDA percentage means lower operating expenses and higher profits, implying that you can pay your operating costs and still have a good amount of revenue left. A “good” EBITDA margin varies from industry to industry, but a 60% margin in most industries is good.

Is Ebitda equal to gross profit?

Gross profit is the profit of a company after subtracting the product or service costs. EBITDA measures a company's profits by showing earnings before interest, taxes, depreciation, and amortization.

Further Reading

The many faces of earnings before interest, tax, depreciation and amortisation (EBITDA): Assessing the decision usefulness of EBITDA disclosure by Johannesburg …The many faces of earnings before interest, tax, depreciation and amortisation (EBITDA): Assessing the decision usefulness of EBITDA disclosure by Johannesburg …
scholar.sun.ac.za [PDF]
… or, more to the point, the need for reinvestment in these long term earning assets … These pro forma earnings statements provide no more information than already exists, and such statements are … the entire bottom half of the page is devoted to alternative income measures, several …

… method and associated modeling software for tax credit investments that will generate positive earnings before income tax depreciation and amortization (ebitda) …… method and associated modeling software for tax credit investments that will generate positive earnings before income tax depreciation and amortization (ebitda) …
patents.google.com [PDF]
… or, more to the point, the need for reinvestment in these long term earning assets … These pro forma earnings statements provide no more information than already exists, and such statements are … the entire bottom half of the page is devoted to alternative income measures, several …

Multiples used to estimate corporate valueMultiples used to estimate corporate value
www.tandfonline.com [PDF]
… or, more to the point, the need for reinvestment in these long term earning assets … These pro forma earnings statements provide no more information than already exists, and such statements are … the entire bottom half of the page is devoted to alternative income measures, several …

DOES EBITDA ADEQUATELY MEASURE OPERATING CASH FLOW?DOES EBITDA ADEQUATELY MEASURE OPERATING CASH FLOW?
search.proquest.com [PDF]
… or, more to the point, the need for reinvestment in these long term earning assets … These pro forma earnings statements provide no more information than already exists, and such statements are … the entire bottom half of the page is devoted to alternative income measures, several …

Size Perusahaan dan Profitabilitas: Kajian Empiris terhadap Perusahaan Manufaktur yang Terdaftar di Bursa Efek JakartaSize Perusahaan dan Profitabilitas: Kajian Empiris terhadap Perusahaan Manufaktur yang Terdaftar di Bursa Efek Jakarta
journal.uii.ac.id [PDF]
… or, more to the point, the need for reinvestment in these long term earning assets … These pro forma earnings statements provide no more information than already exists, and such statements are … the entire bottom half of the page is devoted to alternative income measures, several …

An examination of corporate social responsibility and financial performanceAn examination of corporate social responsibility and financial performance
www.emerald.com [PDF]
… or, more to the point, the need for reinvestment in these long term earning assets … These pro forma earnings statements provide no more information than already exists, and such statements are … the entire bottom half of the page is devoted to alternative income measures, several …

EBITDA [Earnings before Interest, Tax, Depreciation and Amortisation] as an indicator of earnings qualityEBITDA [Earnings before Interest, Tax, Depreciation and Amortisation] as an indicator of earnings quality
search.informit.com.au [PDF]
… or, more to the point, the need for reinvestment in these long term earning assets … These pro forma earnings statements provide no more information than already exists, and such statements are … the entire bottom half of the page is devoted to alternative income measures, several …

EBITDA, EBITA, or EBIT?EBITDA, EBITA, or EBIT?
papers.ssrn.com [PDF]
… or, more to the point, the need for reinvestment in these long term earning assets … These pro forma earnings statements provide no more information than already exists, and such statements are … the entire bottom half of the page is devoted to alternative income measures, several …

Beyond earnings: do EBITDA reporting and governance matter for market participants?Beyond earnings: do EBITDA reporting and governance matter for market participants?
www.emerald.com [PDF]
… or, more to the point, the need for reinvestment in these long term earning assets … These pro forma earnings statements provide no more information than already exists, and such statements are … the entire bottom half of the page is devoted to alternative income measures, several …


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