Series 79 practice questionmediumEBITDA Calculation & Adjustments
A company reports net income of $100 million, interest expense of $20 million, taxes of $30 million, depreciation of $15 million, and amortization of $5 million. What is its EBITDA?
- A$120 million
- B$170 million✓ Correct answer
- C$135 million
- D$150 million
Explanation
Why B — $170 million
EBITDA = Net Income + Interest + Taxes + Depreciation + Amortization = $100m + $20m + $30m + $15m + $5m = $170m. $120m and $135m are incorrect as they do not include all add-backs.
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