What is EBITDA?
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) is a proxy for operating cash earnings, widely used to compare profitability across businesses and industries.
Calculating EBITDA
EBITDA = Net Profit + Interest Expense + Tax Expense + Depreciation + Amortisation. Alternatively, EBITDA = Operating Revenue − Operating Expenses (excluding D&A). It removes accounting and financing decisions to show the raw earning power of the business operations.
EBITDA from ERPNext Data
ERPNext's P&L Statement provides the components needed: Operating Profit (Revenue minus all operating expenses), then add back Depreciation (from the Finance Book) and interest expenses. Use the Finance Book filter to separate depreciation from the EBITDA calculation.
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