Therefore, the easiest way to determine EBIT would be to take the company's net income of $177,000, and add the interest expense of $14,000, resulting in EBIT of $191,000.

To calculate the EBIT, look to the income statement of a firm. You would take the total revenue (that is, all the money that the firm brings in) and then remove all of the firm’s operating expenses.

How to Calculate EBITA. Some companies need to take out large loans to get started, and thus have higher interest expenses when compared with other companies with little debt. To eliminate tax and ...

EBITDA To get a better sense of cashflow, consider calculating the times interest earned ratio using EBITDA instead of EBIT. This variation more closely ties to actual cash received in a given period.

Add the non-cash operating costs to EBIT to calculate EBITDA. In this example, add the $2 million in non-cash operating expenses to the EBIT of $12 million to get an EBITDA value of $14 million.

At the end of the day, EBIT and EBITDA are valuable measures of a company's performance without factoring in very real costs, such as taxes. As such, a company's reported EBITDA is almost always ...