EBIT vs EBITDA Template
This EBIT vs EBITDA template will help you distinguish between EBIT and EBITDA calculations.
This is what the EBIT vs EBITDA template looks like:
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EBIT stands for: Earnings Before Interest and Taxes.
EBITDA stands for: Earnings Before Interest, Taxes, Depreciation, and Amortization.
The difference between EBIT and EBITDA is that Depreciation and Amortization have been added back to Earnings in EBITDA, while they are not backed out of EBIT.
On an income statement, EBIT can be easily calculated by starting at the Earnings Before Tax line and adding to it any interest expenses the company may have incurred. EBITDA can be harder to calculate on the income statement. Depreciation and Amortization can be included in several spots on the income statement (in Cost of Goods Sold and as part of General & Administrative expenses for example) and therefore requires special focus.
The easiest way to ensure you have the full depreciation and amortization number is by checking the Cash Flow Statement, where they will be fully broken out.
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