EBITDA is the acronym for "Earnings Before Interest, Taxes, Depreciation and Amortization", which means "Earnings before interest, taxes, depreciation and amortization", in Portuguese.
EBITDA is a financial indicator, also called Lajida, and represents how much resources a company generates through its operating activities, not counting taxes and other financial effects.
EBITDA is important for entrepreneurs and company administrators, as it gives them the possibility not to analyze only the final result of the organization, but the process as a whole, and this indicator is widely used in the market of actions.
EBITDA is used essentially to analyze the performance of organizations, as it is capable of measuring the productivity and efficiency of the company, a point that is essential for the entrepreneur who intends to invest. The term is widely used by financial analysts when analyzing the accounting balances of publicly traded companies.
Calculate EBITDA
To calculate the EBITDA, it is first necessary to calculate the operating profit, which is the subtraction, from the net revenue, of the cost of products sold (COGS), operating expenses and net financial expenses (expenses less interest income and other items financial).
Then, all you have to do is add interest, depreciation and amortization to the operating profit, which are included in COGS and operating expenses.