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EBITDA

OVERVIEW

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) strips net income back to a measure of core operating profitability by removing four items driven by financing structure, jurisdiction, and accounting policy rather than actual business performance. Tapeboard surfaces EBITDA and EV/EBITDA multiples across all equity and private market views as the default profitability anchor for cross-company comparison.

Note

EBITDA is a non-GAAP metric with no standardized definition. Always verify what has been added back before comparing figures across companies, particularly when "adjusted EBITDA" is displayed.

HOW IT'S CALCULATED

Two equivalent formulas produce the same result:

Approach Formula
Bottom-up from net income Net Income + Interest + Taxes + Depreciation + Amortization
Top-down from operating income Operating Income (EBIT) + Depreciation + Amortization

Depreciation and amortization figures are sourced from the cash flow statement, where they are broken out as non-cash add-backs. Both methods arrive at the same value because operating income already excludes interest and taxes.

Tip

When reviewing Tapeboard's income statement panel, use the D&A toggle to confirm whether the displayed EBITDA figure uses reported or adjusted D&A inputs.

FEATURES

Worked Example — Microsoft FY2025

Metric Value
Revenue $281.7B
Operating Income (EBIT) $128.53B
Depreciation & Amortization ~$31.4B
EBITDA $159.9B
EBITDA Margin 56.8%
Net Income $101.83B
EBITDA vs. Net Income Gap ~$58B

The ~$58B gap between EBITDA and net income represents D&A, interest, and taxes — precisely the items EBITDA excludes to enable comparison against capital-intensive peers without structural distortion.

EV/EBITDA Multiple

Tapeboard uses EV/EBITDA as the default sector comparison multiple because:

  • Enterprise value already incorporates net debt
  • EBITDA already strips out interest expense generated by that debt
  • The ratio neutralizes leverage differences that would distort a P/E comparison

This multiple is especially load-bearing in the following sectors:

Sector Reason
Telecom & Cable Large, volatile D&A from infrastructure
Industrials High capital intensity
Private Equity / LBO Purchase multiples and debt covenant setting
Real Estate Depreciation distorts net income significantly

HOW TO USE

Viewing EBITDA in Tapeboard

  1. Open any equity profile from the search bar or watchlist.
  2. Navigate to the Financials tab.
  3. Select Income Statement and enable the EBITDA row from the column picker.
  4. Switch between Reported and Adjusted views to compare standard vs. company-disclosed figures.
  5. Use the Margin % toggle to display EBITDA margin alongside absolute values.

Screening by EBITDA Margin

  1. Open Screener from the left navigation panel.
  2. Under Profitability, add the EBITDA Margin filter.
  3. Set a minimum threshold and apply a sector filter to normalize for capital intensity differences.
  4. Sort results by EBITDA Margin (QoQ Change) to identify operating-efficiency trends.

Tip

Tracking EBITDA margin quarter-over-quarter is a reliable operating-efficiency signal independent of a company's financing decisions. Use the Trend Chart overlay in the Financials tab to visualize this.

Note

EBITDA is not free cash flow. It ignores capital expenditures entirely. Use the FCF Bridge panel alongside EBITDA to assess whether a business retains meaningful cash after maintenance capex.

KEYBOARD SHORTCUTS

Shortcut Action
E Toggle EBITDA row on active income statement
Shift + E Switch between reported and adjusted EBITDA
M Toggle margin % display on all profitability rows
V Open EV/EBITDA multiple view for active ticker
Shift + V Compare EV/EBITDA against sector median
T Enable quarter-over-quarter trend overlay