EBITDA

What The Hell is EBITDA?

EBITDA is a way to see how much raw cash a business is truly making from its day-to-day work.

It ignores things that confuse the real picture, like bank loans Financing costs = Money paid to borrow funds, government taxes, or weird accounting rules Depreciation = A paper deduction showing your equipment losing value over time.

So investors can see if the core business is actually healthy.

Real World Example & Calculation:

- Imagine your startup reports a final profit Net profit = The money left after absolutely all bills are paid of ₹10 Lakhs.
- Final Profit: ₹10,00,000
- Add back Taxes paid: + ₹2,00,000
- Add back Bank Loan Interest: + ₹1,00,000
- Add back Accounting deductions (like laptops losing value): + ₹2,00,000
- EBITDA = ₹10L + ₹2L + ₹1L + ₹2L = ₹15 Lakhs

✍🏻 Mantra Joshi

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