Calculating EBITDA – otherwise known as Earnings Before Interest, Taxes, Depreciation, and Amortization – is a commonly used measure of a company’s financial performance. It is calculated by subtracting a company’s operating expenses, such as sales, general, and administrative costs, from its total revenues. The resulting figure, which also includes the cost of goods sold, provides insights into a company’s profitability and cash flow before non-operating items are taken into account. In doing so, EBITDA can help stakeholders – such as investors and lenders – assess a company’s financial health with greater clarity.