Ebitda - Revision history

S220432 at 01:15, 28 March 2022

2022-03-28T01:15:33Z

← Older revision		Revision as of 01:15, 28 March 2022
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	== Calculation ==		== Calculation ==

	There are two ways of calculating EBITDA, either through using operating income or by starting with net income. With the first one, the formula equates to EBITDA = operating income +depreciation + appreciation. The latter equation is given by EBITDA = Net income + taxes + interest expense + depreciation + amortization. Which one of these to use simply comes down to numbers available, and personal preference.		There are two ways of calculating EBITDA, either through using operating income or by starting with net income. With the first one, the formula equates to EBITDA = operating income +depreciation + appreciation. The latter equation is given by EBITDA = Net income + taxes + interest expense + depreciation + amortization. Which one of these to use simply comes down to numbers available, and personal preference.(Corporate Finance Institute, 2022)[https://corporatefinanceinstitute.com/resources/knowledge/finance/what-is-ebitda/]

	[[File:How-to-calculate-ebitda.jpg]]		[[File:How-to-calculate-ebitda.jpg]]

S220432 at 22:28, 27 March 2022

2022-03-27T22:28:33Z

← Older revision		Revision as of 22:28, 27 March 2022
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	Corporate Finance Institute. (2022, 02 22). Corporate Finance Institute. Collected from Corporate Finance Institute: https://corporatefinanceinstitute.com/resources/knowledge/accounting/non-gaap-earnings/		Corporate Finance Institute. (2022, 02 22). Corporate Finance Institute. Collected from Corporate Finance Institute: https://corporatefinanceinstitute.com/resources/knowledge/accounting/non-gaap-earnings/
	Corporate Finance Institute. (n.d.). ~~Corporate Finance Institute~~. Retrieved from Corporate Finance Institute: https://corporatefinanceinstitute.com/resources/knowledge/finance/what-is-ebitda/		Corporate Finance Institute. (n.d.). What is ebitda. Retrieved from Corporate Finance Institute: https://corporatefinanceinstitute.com/resources/knowledge/finance/what-is-ebitda/
	Graham, B. (1973). The Intelligent Investor. Harper Collins Publishers.		Graham, B. (1973). The Intelligent Investor. Harper Collins Publishers.
			My Accounting Course. (n.d.). Ebitda. Retrieved from My Accounting Course: https://www.myaccountingcourse.com/financial-ratios/ebitda
	Internet Archive. (2022, 02 20). Business Dictionary. Collected from Internet Archive: https://web.archive.org/web/20170715120752/http://www.businessdictionary.com/definition/amortization.html		Internet Archive. (2022, 02 20). Business Dictionary. Collected from Internet Archive: https://web.archive.org/web/20170715120752/http://www.businessdictionary.com/definition/amortization.html
	Luciano, R. (2003). EBITDA [Earnings before Interest, Tax, Depreciation and Amortisation] as an indicator of earnings quality. JASSA.		Luciano, R. (2003). EBITDA [Earnings before Interest, Tax, Depreciation and Amortisation] as an indicator of earnings quality. JASSA.

S220432 at 22:26, 27 March 2022

2022-03-27T22:26:14Z

← Older revision		Revision as of 22:26, 27 March 2022
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	Corporate Finance Institute. (2022, 02 22). Corporate Finance Institute. Collected from Corporate Finance Institute: https://corporatefinanceinstitute.com/resources/knowledge/accounting/non-gaap-earnings/		Corporate Finance Institute. (2022, 02 22). Corporate Finance Institute. Collected from Corporate Finance Institute: https://corporatefinanceinstitute.com/resources/knowledge/accounting/non-gaap-earnings/
			Corporate Finance Institute. (n.d.). Corporate Finance Institute. Retrieved from Corporate Finance Institute: https://corporatefinanceinstitute.com/resources/knowledge/finance/what-is-ebitda/
	Graham, B. (1973). The Intelligent Investor. Harper Collins Publishers.		Graham, B. (1973). The Intelligent Investor. Harper Collins Publishers.
	Internet Archive. (2022, 02 20). Business Dictionary. Collected from Internet Archive: https://web.archive.org/web/20170715120752/http://www.businessdictionary.com/definition/amortization.html		Internet Archive. (2022, 02 20). Business Dictionary. Collected from Internet Archive: https://web.archive.org/web/20170715120752/http://www.businessdictionary.com/definition/amortization.html

S220432 at 22:24, 27 March 2022

2022-03-27T22:24:04Z

← Older revision		Revision as of 22:24, 27 March 2022
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	[[File:Ebitda-example-detail.png]]		[[File:Ebitda-example-detail.png]]
	Collected from [https://corporatefinanceinstitute.com/resources/knowledge/finance/what-is-ebitda/]		Collected from Corporate Finance Institute: [https://corporatefinanceinstitute.com/resources/knowledge/finance/what-is-ebitda/]


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	[[File:How-to-calculate-ebitda.jpg]]		[[File:How-to-calculate-ebitda.jpg]]
	Collected from [https://www.myaccountingcourse.com/financial-ratios/ebitda]		Collected from Collected from My Accounting Course: [https://www.myaccountingcourse.com/financial-ratios/ebitda]

S220432 at 22:22, 27 March 2022

2022-03-27T22:22:52Z

← Older revision		Revision as of 22:22, 27 March 2022
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	[[File:Ebitda-example-detail.png]]		[[File:Ebitda-example-detail.png]]
			Collected from [https://corporatefinanceinstitute.com/resources/knowledge/finance/what-is-ebitda/]


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	[[File:How-to-calculate-ebitda.jpg]]		[[File:How-to-calculate-ebitda.jpg]]
			Collected from [https://www.myaccountingcourse.com/financial-ratios/ebitda]

S220432 at 21:42, 27 March 2022

2022-03-27T21:42:26Z

← Older revision		Revision as of 21:42, 27 March 2022
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	== References ==		== References ==

	Corporate Finance Institute. (2022, 02 22). Corporate Finance Institute. ~~Hentet fra~~ Corporate Finance Institute: https://corporatefinanceinstitute.com/resources/knowledge/accounting/non-gaap-earnings/		Corporate Finance Institute. (2022, 02 22). Corporate Finance Institute. Collected from Corporate Finance Institute: https://corporatefinanceinstitute.com/resources/knowledge/accounting/non-gaap-earnings/
	Graham, B. (1973). The Intelligent Investor. Harper Collins Publishers.		Graham, B. (1973). The Intelligent Investor. Harper Collins Publishers.
	Internet Archive. (2022, 02 20). Business Dictionary. ~~Hentet fra~~ Internet Archive: https://web.archive.org/web/20170715120752/http://www.businessdictionary.com/definition/amortization.html		Internet Archive. (2022, 02 20). Business Dictionary. Collected from Internet Archive: https://web.archive.org/web/20170715120752/http://www.businessdictionary.com/definition/amortization.html
	Luciano, R. (2003). EBITDA [Earnings before Interest, Tax, Depreciation and Amortisation] as an indicator of earnings quality. JASSA.		Luciano, R. (2003). EBITDA [Earnings before Interest, Tax, Depreciation and Amortisation] as an indicator of earnings quality. JASSA.
	Nissim, D. (2019). EBITDA, EBITA or EBIT. Colombia Business School.		Nissim, D. (2019). EBITDA, EBITA or EBIT. Colombia Business School.
	Peterson, R. H. (2002, 02 20). Accounting for Fixed Assets. John Wiley and Sons. ~~Hentet fra~~ Bench: https://bench.co/blog/tax-tips/depreciation/		Peterson, R. H. (2002, 02 20). Accounting for Fixed Assets. John Wiley and Sons. Collected from Bench: https://bench.co/blog/tax-tips/depreciation/
	Previts, G. J. (2002). Research in Accounting. JAI.		Previts, G. J. (2002). Research in Accounting. JAI.
	Pritchard, J. (2022, 02 19). What is Interest? ~~Hentet fra~~ The Balance: https://www.thebalance.com/what-is-interest-315436		Pritchard, J. (2022, 02 19). What is Interest? Collected from The Balance: https://www.thebalance.com/what-is-interest-315436

S220432 at 21:41, 27 March 2022

2022-03-27T21:41:22Z

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	A project, program or portfolio manager can utilize this tool in order to analyze past, current and future profitability, and plan accordingly. By drafting an expected EBITDA, one can attract investment and appease current stakeholders by delivering information relative to expected earnings. Furthermore, the tool can also be used as an indicator of success in previous ventures, providing feedback as to how well a project performed. With this statistic, one can then reflect over where improvements could be made, what worked, and why the final earnings ended up where they did.		A project, program or portfolio manager can utilize this tool in order to analyze past, current and future profitability, and plan accordingly. By drafting an expected EBITDA, one can attract investment and appease current stakeholders by delivering information relative to expected earnings. Furthermore, the tool can also be used as an indicator of success in previous ventures, providing feedback as to how well a project performed. With this statistic, one can then reflect over where improvements could be made, what worked, and why the final earnings ended up where they did.


			== References ==

			Corporate Finance Institute. (2022, 02 22). Corporate Finance Institute. Hentet fra Corporate Finance Institute: https://corporatefinanceinstitute.com/resources/knowledge/accounting/non-gaap-earnings/
			Graham, B. (1973). The Intelligent Investor. Harper Collins Publishers.
			Internet Archive. (2022, 02 20). Business Dictionary. Hentet fra Internet Archive: https://web.archive.org/web/20170715120752/http://www.businessdictionary.com/definition/amortization.html
			Luciano, R. (2003). EBITDA [Earnings before Interest, Tax, Depreciation and Amortisation] as an indicator of earnings quality. JASSA.
			Nissim, D. (2019). EBITDA, EBITA or EBIT. Colombia Business School.
			Peterson, R. H. (2002, 02 20). Accounting for Fixed Assets. John Wiley and Sons. Hentet fra Bench: https://bench.co/blog/tax-tips/depreciation/
			Previts, G. J. (2002). Research in Accounting. JAI.
			Pritchard, J. (2022, 02 19). What is Interest? Hentet fra The Balance: https://www.thebalance.com/what-is-interest-315436

S220432 at 21:33, 27 March 2022

2022-03-27T21:33:33Z

← Older revision		Revision as of 21:33, 27 March 2022
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	A project, program or portfolio manager can utilize this tool in order to analyze past, current and future profitability, and plan accordingly. By drafting an expected EBITDA, one can attract investment and appease current stakeholders by delivering information relative to expected earnings. Furthermore, the tool can also be used as an indicator of success in previous ventures, providing feedback as to how well a project performed. With this statistic, one can then reflect over where improvements could be made, what worked, and why the final earnings ended up where they did.		A project, program or portfolio manager can utilize this tool in order to analyze past, current and future profitability, and plan accordingly. By drafting an expected EBITDA, one can attract investment and appease current stakeholders by delivering information relative to expected earnings. Furthermore, the tool can also be used as an indicator of success in previous ventures, providing feedback as to how well a project performed. With this statistic, one can then reflect over where improvements could be made, what worked, and why the final earnings ended up where they did.


	~~==References==~~

	~~<references />~~

S220432 at 21:28, 27 March 2022

2022-03-27T21:28:18Z

← Older revision		Revision as of 21:28, 27 March 2022
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	== Calculation ==		== Calculation ==

	There are two ways of calculating EBITDA, either through using operating income or by starting with net income. With the first one, the formula equates to EBITDA = operating income +depreciation + appreciation. The latter equation is given by EBITDA = Net income + taxes + interest expense + depreciation + amortization.		There are two ways of calculating EBITDA, either through using operating income or by starting with net income. With the first one, the formula equates to EBITDA = operating income +depreciation + appreciation. The latter equation is given by EBITDA = Net income + taxes + interest expense + depreciation + amortization. Which one of these to use simply comes down to numbers available, and personal preference.

	[[File:How-to-calculate-ebitda.jpg]]		[[File:How-to-calculate-ebitda.jpg]]

S220432 at 21:25, 27 March 2022

2022-03-27T21:25:21Z

← Older revision		Revision as of 21:25, 27 March 2022
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	EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a measure of a company’s operating profit. As the abbreviation entails, this operating profit is measured before the mentioned expenses of interest, taxes, depreciation, and amortization are calculated into the earnings. When one accounts for these, the net profit is found. EBITDA is a common measurement of a company’s financial success over a given period. As one might expect, this measurement can have some drawbacks in addition to strengths.		EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a measure of a company’s operating profit. As the abbreviation entails, this operating profit is measured before the mentioned expenses of interest, taxes, depreciation, and amortization are calculated into the earnings. When one accounts for these, the net profit is found. EBITDA is a common measurement of a company’s financial success over a given period. As one might expect, this measurement can have some drawbacks in addition to strengths.
	This article relates to the topic of advanced ~~Engineering~~ project, program, and portfolio management as it is a common indicator of financial success within a portfolio. Achieving a better EBITDA is the main goal within the management of many enterprises. As mentioned, it could be discussed whether this is positive or negative, but generally, investors are pleased with an improvement in EBITDA, and financial newspapers will often highlight these in their slates detailing companies’ earnings reports. It is therefore wise for any project, program, or portfolio manager to understand EBITDA.		This article relates to the topic of advanced engineering project, program, and portfolio management as it is a common indicator of financial success within a portfolio. Achieving a better EBITDA is the main goal within the management of many enterprises. As mentioned, it could be discussed whether this is positive or negative, but generally, investors are pleased with an improvement in EBITDA, and financial newspapers will often highlight these in their slates detailing companies’ earnings reports. It is therefore wise for any project, program, or portfolio manager to understand EBITDA.


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	As stated, usage of EBITDA is widely accepted in the stock market community as an indicator of a company’s financial health. Investors argue for the validity of this indicator, as some claim it is a poor valuation metric as opposed to cash-flow f.eks, while others claim it is better. Generally, it is always best to combine different types and acquire a full detailed picture. In this case, EBITDA is one of the majors one should consider looking at. (Nissim, 2019)		As stated, usage of EBITDA is widely accepted in the stock market community as an indicator of a company’s financial health. Investors argue for the validity of this indicator, as some claim it is a poor valuation metric as opposed to cash-flow f.eks, while others claim it is better. Generally, it is always best to combine different types and acquire a full detailed picture. In this case, EBITDA is one of the majors one should consider looking at. (Nissim, 2019)

	The reasoning behind this is that EBITDA excludes one-offs such as depreciation, which sometimes can create serious devastation on the final net profit in an earnings sheet. While cash flow also would exclude this factor, amortization could ~~be one that impacts~~ this heavily. Some industries will have such a large depreciation that it turns the whole net profit negative based on an adjustment of assets. This was evidenced during 2020, when oil companies depreciated the worth of hydrocarbon reserves not yet produced, due to the lower price of oil. As the oil price is now at an all-time high in several currencies, this might have proved to be an unnecessary action, made necessary due to accounting regulations. Someone who just looks at net profits would therefore see a worse picture than someone who just looks at EBITDA. (Nissim, 2019)		The reasoning behind this is that EBITDA excludes one-offs such as depreciation, which sometimes can create serious devastation on the final net profit in an earnings sheet. While cash flow also would exclude this factor, amortization could impact this heavily. Some industries will have such a large depreciation that it turns the whole net profit negative based on an adjustment of assets. This was evidenced during 2020, when oil companies depreciated the worth of hydrocarbon reserves not yet produced, due to the lower price of oil. As the oil price is now at an all-time high in several currencies, this might have proved to be an unnecessary action, made necessary due to accounting regulations. Someone who just looks at net profits would therefore see a worse picture than someone who just looks at EBITDA. (Nissim, 2019)

	This works both ways, as EBITDA may provide an incomplete picture compared to reality within an earnings report. This is particularly true for the industry sector, as machines and such must be replaced after a certain time period. While one might get the impression that the company is making money over a five-year period looking at EBITDA, this might not be true. As suddenly the total EBITDA might turn negative when new machines need to be purchased. (Previts, 2002)		This works both ways, as EBITDA may provide an incomplete picture compared to reality within an earnings report. This is particularly true for the industry sector, as machines and such must be replaced after a certain time period. While one might get the impression that the company is making money over a five-year period looking at EBITDA, this might not be true. As suddenly the total EBITDA might turn negative when new machines need to be purchased. (Previts, 2002)



			== Calculation ==

			There are two ways of calculating EBITDA, either through using operating income or by starting with net income. With the first one, the formula equates to EBITDA = operating income +depreciation + appreciation. The latter equation is given by EBITDA = Net income + taxes + interest expense + depreciation + amortization.

			[[File:How-to-calculate-ebitda.jpg]]