![Trending Articles on Technical and Non Technical topics](/images/trending_categories.jpeg)
Data Structure
Networking
RDBMS
Operating System
Java
MS Excel
iOS
HTML
CSS
Android
Python
C Programming
C++
C#
MongoDB
MySQL
Javascript
PHP
Physics
Chemistry
Biology
Mathematics
English
Economics
Psychology
Social Studies
Fashion Studies
Legal Studies
- Selected Reading
- UPSC IAS Exams Notes
- Developer's Best Practices
- Questions and Answers
- Effective Resume Writing
- HR Interview Questions
- Computer Glossary
- Who is Who
What are steps involved in calculating EBITDA and EBITDA coverage ratio or How EBITDA and EBITDA ratio is calculated?
Solution
The solution is explained below −
EBITDA = Np+In+Ta+D+A EBITDA = 175000+20000+35000+8000 EBITDA= 238000/-
Here, Np=Net Profit, In=Interest, Ta=Taxes, D = Depreciation, A= Amortization
EBITDA= OI*+ D+ A EBITDA = (525000-200000-95000) + 8000 EBITDA = 238000/-
Here, OI* = Operating Income, D = Depreciation, A= Amortization
(*Operating income (OI) = total revenue – cost of goods sold – operating expenses)
EBITDA Coverage Ratio = (EBITDA+LP)/ (IP+PP+LP) EBITDA Coverage Ratio = (238000+15000)/ (5000+7500+15000) EBITDA Coverage Ratio = (253000)/ (27500) EBITDA Coverage Ratio = 9.2
Here, LP = Lease payments, IP= Interest payment, PP = Principal payments.
Advertisements