EBITDA Formula – Example #1

Let us take the example of ABC Ltd to calculate its

EBITDA. ABC Ltd is engaged in the business of soft
drinks manufacturing in the city of DELHI,INDIA. As
per the annual report published recently, the
company has clocked a turnover of RS 250,000. The
information is available from the income statement.

Calculate ABC Ltd.’s EBITDA during the financial year

based on the given information.
PARTICULARS AMOUNT
NET INCOME ₹ 80,000.00
INTEREST ₹ 15,000.00
TAX ₹ 5,000.00
DEPRECIATION ₹ 20,000.00

EBITDA = Net Income + Interest + Tax + Depreciation & Amortization

EBITDA ₹ 120,000.00 ₹ 120,000.00

EBITDA Formula – Example #2

Based on the latest annual report for the year ending on September
29, 2018, the information is available. Calculate net income based
on the information, Then calculate Apple Inc.’s EBITDA if interest
expense and depreciation & amortization expense are $3,240
million and $10,903 million respectively.

PARTICULARS AMOUNT
NET SALES 265595
COST OF SALES 163756
R&D 14236
SELLING , ADMIN EXPENSES 16705
OTHER INCOME 2005
TAXES 13372
INTEREST 3240
DEPRECIATION 10903

NET INCOME 55521

EBITDA = Net Income + Interest + Tax + Depreciation & Amortization
EBITDA 83036
Ron’s Lawn Care Equipment and Supply company manufacturers tractors for commercial use. This year his
income statement reports the following activities:

Sales: $1,000,000
CGS: $650,000
Gross Profit: $350,000
Operating Expenses: $200,000
Interest Expense: $50,000
Income Taxes: $10,000
Net Income: $90,000
In this example, Ron’s company earned a profit of $90,000 for the year. In order to
calculate our EBIT ratio, we must add the interest and tax expense back in. Thus,
Ron’s EBIT for the year equals $150,000.

This means that Ron has $150,000 of profits left over after all of the cost of goods
sold and operating expenses have been paid for the year. This $150,000 left over is
available to pay interest, taxes, investors, or pay down debt.