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CA supriyo saha

CA supriyo saha (Querist)
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12 March 2010 whether EBITDA reflects operating profit

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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12 March 2010 EBITDA is an indicator of a company's financial performance which is calculated as under:

EBITDA=Revenue-Expenses(excluding Interest, Tax, Depreciation and other amortizations)

Yes, in pure terms it is Operating Profit which may be used to compare the two organisations irrespective of the Finance Cost, depreciation, tax etc which have no direct nexus with operations.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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12 March 2010 My view it will not.becasue the operating profit is purely realted to operating activities like that Gross profit But in EBITDA after charging the overheads and admin & general cost.so it will not reflect

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