EBITDA · FAVÖK

EBITDA

Short definition

EBITDA is earnings before interest, tax, depreciation and amortisation. It adds back non-cash D&A to operating profit; it does not measure tax, working-capital or investment cash outflows.

Detailed explanation

In practice EBITDA is EBIT plus D&A, or revenue less cash operating costs. Management often “adjusts” it for one-offs, FX or inventory; each adjustment must be tested for cash and for repeatability.

Bank packs and trading multiples treat EBITDA as a starting point for leverage and enterprise value. EBITDA still ignores maintenance capex, receivable and inventory build, and cash tax. CFADS, free cash flow and EBITDA are not interchangeable.

Why it matters for the CFO

Leverage covenants, loan pricing and EV/EBITDA all hang on this number. The CFO’s job is not to maximise it, but to keep the definition used for debt, bonuses and valuation distinct, and not to translate non-cash EBITDA into debt capacity.

How it is calculated

EBITDA = FVÖK + Amortisman + İtfa

Whether EBIT is “operating profit” or a wider earnings-before-interest-and-tax figure must be locked in the notes. D&A is added because it is non-cash; provisions and discounting are not automatic add-backs.

Variables in the formula

• EBITDA: EBITDA
• EBIT: EBIT (operating profit; definition varies)
• D&A: Depreciation and amortisation

How to read it

EBITDA margin shows operating leverage and the price–cost gap; absolute EBITDA shows scale. High EBITDA with heavy capex or working-capital need can still leave free cash flow negative. Asset intensity and lease mix (EBITDA vs EBITDAR) break naive peer comparison.

Numerical example

EBIT 80 mn TL, depreciation 30 mn TL, amortisation 10 mn TL → EBITDA = 80 + 30 + 10 = 120 mn TL.

Definitions are educational. They are not investment, credit or tax advice.