← The FP&A libraryPractice · 45 questions →
Financial statements
EBITDA
Earnings before interest, tax, depreciation, and amortisation. Operating income with the non-cash depreciation and amortisation added back — a rough proxy for operating cash generation.
Owned by: AnalystTest band: Analyst
The formula
EBITDA = Operating income + D&A
In practice
Lenders and buyers quote it constantly. It is not cash flow: it ignores capex, working capital, and the tax bill.
The kind of thing the test asks
- Operating income $200k, depreciation $50k, interest $30k, tax $40k. EBITDA is…