How to calculate EBITDA?

You can calculate EBITDA in two ways, if depreciation and amortization is split out as a separate line item in the income statement.

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0:00 How to calculate EBITDA
0:19 EBITDA example
0:46 Calculate EBITDA for any company
1:13 Calculate EBITDA using income statement and cash flow statement

But what if a company does not split out depreciation and amortization in their income statement? Like for example Walmart (NYSE: WMT). Can you still calculate EBITDA? Yes, as you can find the depreciation and amortization number on the cash flow statement, as many companies use the indirect method of cash flow reporting: you start with the net income, and then make adjustments to reconcile net income to CFOA. The main line item in that reconciliation is depreciation and amortization.

Related videos:
EBITDA example youtube.com/watch?v=7e_6qEo1grI
EBIT and EBITDA explained simply youtube.com/watch?v=N6ZgIVAQeXQ

Philip de Vroe (The Finance Storyteller) aims to make strategy, finance and leadership enjoyable and easier to understand. Learn the business vocabulary to join the conversation with your CEO at your company. Understand how financial statements work in order to make better stock market investment decisions. Philip delivers training in various formats: YouTube videos, classroom sessions, webinars, and business simulations. Connect with me through Linked In!