EBITDA vs EBIT
EBITDA adds depreciation and amortization back as non-cash charges; EBIT leaves them in as a real cost of doing business, so EBITDA is always equal to or larger than EBIT.
The difference
Both metrics strip out financing costs and income tax, so you can compare the underlying earning power of two businesses even if one carries a lot of debt and the other carries none. The difference between them is a single line: depreciation and amortization. EBIT is profit from core operations with D&A still charged as an expense — it treats the wearing-down of assets as a real cost of running the business. EBITDA adds D&A back on the grounds that they are non-cash accounting charges, which turns it into an approximation of the cash a company's operations produce before financing, taxes, and capital costs. Because that add-back only ever runs one direction, EBITDA is always equal to or larger than EBIT.
Side by side
| Aspect | EBITDA | Earnings Before Interest & Taxes |
|---|---|---|
| What it measures | Approximate cash from operations before financing, taxes, and capital costs. | Profit from core operations before financing costs and income tax. |
| Depreciation & amortization | Added back — treated as a non-cash accounting charge. | Left in — treated as a real cost of using up assets. |
| How it's built | EBIT + D&A, or Net Income + Interest + Tax + D&A. | Revenue − COGS − Operating Expenses, or Net Income + Interest + Tax. |
| Relative size | Always equal to or larger than EBIT. | Always equal to or smaller than EBITDA. |
| Main blind spot | Ignores capex, interest, taxes, and working-capital changes. | Still says nothing about financing costs or the tax bill. |
| Standing in the accounts | Not a measure defined by GAAP or IFRS. | Usually very close to reported operating income. |
Which one to use
Reach for EBITDA when…
EBITDA is the more useful lens when you want to compare profitability across companies with different debt, tax, and asset-aging profiles. A firm running newly built plants carries heavier D&A than a rival operating the same kind of assets a decade older, and that gap often says more about accounting history than about how the operations are actually doing. EBITDA is also the input behind valuation multiples such as EV/EBITDA, so you need it to follow how much of the market quotes and compares deals.
Reach for Earnings Before Interest & Taxes when…
EBIT is the more useful lens when the assets being consumed are central to the business and you don't want their cost to vanish from the page. Leaving D&A in keeps the wearing-down of plants, fleets, and acquired intangibles visible, which matters most for capital-heavy firms whose spending on those assets never really stops. It also sits close to the reported operating income subtotal, so it's easier to tie back to the filed statements.
The concrete mistake is reading EBITDA as "profit" — or comparing one company's EBITDA against another company's EBIT — and concluding the business is healthier than the accounts show. A pipeline, airline, or cable operator can post a wide EBITDA margin and a thin EBIT, because the assets it runs genuinely wear out and genuinely have to be replaced; EBITDA ignores real capital spending and interest, so it can make capital-heavy or highly indebted companies look healthier than they are. EBITDA is also not defined by GAAP or IFRS, so what one filer adds back isn't always what the next filer adds back — check the reconciliation before treating two EBITDA figures as like-for-like.
How Quintarthai uses them
Both figures are shown on the same company profile in /app/, computed from the reported income statement, so you can see the size of the D&A gap between them instead of taking either number on its own. They're there for study and comparison only — neither figure is a recommendation, and neither predicts a return.