How To Calculate EBITA
Earnings Before Interest, Taxes and Amortization or EBITA is used commonly when calculating profitability and efficiency ratios for firms. The numbers needed for calculating this are often found in a company's income statement. This is what some people use to get a ballpark figure of their raw earnings.
Earnings before interest, tax and amortization or EBITA is almost like EBIT but removes amortization because it is always a non-cash item and doesn't interest most serious investors. Just to give you an idea on how negligible amortization is to serious investors, they take more into consideration depreciation when determining viability. Amortization often relates to a company's intangible assets and can't be used even in rough approximation for replacement cost.
Just follow the steps below to calculate your EBITA. You'll need the company income statement and a handy calculator to do the math for you.
