Question

Bitter, Inc.'s income statement included $100,000 of revenues; $60,000 of cost of goods sold; $20,000 of other operating expenses (which includes $10,000 of depreciation); $1,000 of interest expense; and $6,000 of income tax expense. EBITDA equals $____.

Answer 1

To calculate EBITDA, subtract the relevant expenses from the revenues in the income statement.

Step-by-step explanation:

To calculate EBITDA, we need to add the following items from the income statement: revenues, cost of goods sold, other operating expenses (excluding depreciation), interest expense, and income tax expense. EBITDA is calculated as: $100,000 (revenues) - $60,000 (cost of goods sold) - $10,000 (depreciation) - $20,000 (other operating expenses, excluding depreciation) - $1,000 (interest expense) - $6,000 (income tax expense).

Therefore, EBITDA equals $3,000.