When it comes to the financial profitability of a company, various factors are involved in this relation. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) highlights the profitability of an organization. In an overall manner, it elaborates the financial performance of a company.
The Depreciation and Amortization factor
As compared to EBIT, EBITDA also involves the components of depreciation and amortization. In simple terms, depreciation is the devaluation of an asset over the period of time. When plant and machinery is used for a period of time, it value starts declining. Thus, when EBITDA is determined, the earnings are calculated before depreciation is taken into account.
EBITDA formula and its interpretation
The formula of EBITDA is given as follows
EBITDA = Net Income + Interest + Taxes + Depreciation + Amortization
In the above formula, we can see that EBITDA is determined by adding five financial components. These include Net Income, Interest, Taxes, Depreciation and Amortization. All these financial components are used to determine the value of EBITDA.
Financial calculations are not simply by any means. If you are not using a proper technological tool to complete these calculations, there are high chances that you would make errors. In addition to that, only the best EBITDA calculators should be used for this purpose. The EBITDA calculator by Calculators. Tech is a quality tool with the best calculation features. This tool has usage simplicity and produces the most accurate outputs. Anyone who has basic technical knowledge can use this tool.
Working process of EBITDA calculator
As a user, it is important to know the usage process of this calculator by Calculators.Tech. Here are some essential steps which have to be completed.
1. Enter the Inputs
The interface of this EBITDA calculator is very simple. Unlike various other tools, users do not have to enter several values or check numerous drop down menus. Nothing like this is needed. When you open the link to the calculator, you would figure out that there are two input values on the left. One of them is “Revenue” and the other is “Operating Expenses”. The first step is entering both these input values.
2. Executing calculation
When the values have been entered, you can move on to the next and final step. Simply click the “Calculate Button” given below the text boxes for input. In this way, the EBITDA value would be calculated.
Calculators.Tech EBITDA calculator is quick and efficient
It is not that easy to find the correct tool with so many options present online. This is big concern because the efficiency of calculations depends on how reliable the calculator is. If the calculator is not dependable, the produced value would not be correct. EBITDA is a complex financial value effecting various other monetary accounts of a company. Thus, users should be sure that they are using a tool with zero reliability problems.
- The EBITDA calculator is completely efficient. This simply means that no mistakes are made during the process of performing calculations. Efficiency is a big concern for users when they are determining the EBITDA value. Even a small mistake can generate big numerical errors. This EBITDA calculator is completely efficient. As a user, you can be absolutely sure that no mistakes would be made while the calculations are being performed.
- If you are using this EBITDA calculator, you would not have to wait long for the results to be generated. This tool is technologically sound and produces correct EBITDA results in a quick manner. Secondly, it is completely online so users do not have to make any heavy downloads to use the tool. You can use the tool simply by clicking the link to it.
- The tool is 100% free and users do not have to spend money for any of the features. There is no limitation of the features that can be used and no trouble of trial version exists as well. Users can perform as many calculations as they want to without any trouble.
Saving time spent on calculating EBITDA manually
Financial calculations are cumbersome. Along with the risk of making mistakes, a lot of time is spent on performing these calculations. If you are not using a tool, it simply means putting in long hours to complete them. With the EBITDA calculator, you can obviously save precious time for yourself.
Difference between EBIT and EBITDA
- In literal financial terms, EBIT elaborates the revenue or profit of the company while EBITDA is a definition of the cash flow.
- Another key difference between EBIT and EBITDA is the category of assets which each of them deals with. For instance, when you talk about EBITDA, it deals with intangible assets effecting the company progress.
Financial calculations are not easy to complete by any means. If you do not have a proper technological tool, things would become quite exhausting for you. Using a dependable tool is actually a big relief. First of all, you do not need to do any hard work by adding figures manually. This is certainly not needed. However, it is important that tool being used is completely dependable. A lot of EBITDA calculators seem dependable but have efficiency issues.
The EBITDA calculator is one of the finest alternatives available to users. To start with, it is very quick in terms of usability. The EBITDA value is determined in a short span of time after the input values are entered. This EBITDA calculator helps users in cutting down the human effort. If you are not using a quality tool, the amount of human effort needed increases a lot.
It is always beneficial to opt for a tool with an easy interface so that calculations can be completed in quick time without any problem. This EBITDA calculator is dependable which is the reason why people prefer it so much. In an overall manner, if you are seeking a quality tool to calculate EBITDA, this is an ideal alternative.