How to use it
- Use the formula below with your own figures.
The formula
EBITDA = revenue − operating expenses (excl. interest, tax, D&A).
Worked example
It's a common proxy for operating cash generation.
Frequently asked questions
Why use EBITDA?
It compares operating performance across firms.
Limits?
It ignores capital costs and real cash needs.
Tips
- Know your break-even before scaling spend.
- Separate margin from markup when pricing.
- Discount future cash flows to value projects.
Key terms
- Break-even
- Where revenue covers costs.
- Margin
- Profit as a percent of price.
- NPV
- Discounted value of future cash flows.