How is EBITDA calculated in an MIS report?
The short answer
EBITDA = revenue − direct costs − employee costs − other operating expenses.
Interest, tax, depreciation and amortisation are left out by definition. Other income, such as interest received or a one-off gain, is left out too, because it is not what the operations earned. It goes below EBITDA, on the way to profit before tax.
Other income does not belong in EBITDA
EBITDA exists to show what the business earns from running itself, before financing and accounting choices. Interest on a deposit, a gain on selling a vehicle or a one-off grant can lift a weak month into a good one if they are added in, and the margin then says something the operations did not do. Keeping other income out makes one month comparable with the next.
Where it sits on the way to profit before tax
Profit before tax = EBITDA + other income − depreciation − finance costs − exceptional items.
| ₹ lakh, one month | Amount |
|---|---|
| Revenue | 500 |
| Less direct costs | (300) |
| Less employee costs | (80) |
| Less other operating expenses | (50) |
| EBITDA | 70 |
| Add other income | 12 |
| Less depreciation and amortisation | (15) |
| Less finance costs | (9) |
| Profit before tax | 58 |
EBITDA margin = EBITDA ÷ revenue × 100: here 70 ÷ 500, or 14%.
Every figure shown here is invented for illustration. Nothing on this page is computed from anyone’s accounts.
The same definition every month, for every company
Magic MIS computes EBITDA this way for every company and every month, with other income added back below it on the way to profit before tax. Each figure opens to the heads and ledgers it was built from.
Read next
- KPIs and ratios for a monthly MIS: formulas and what they tell youThe ratios a monthly MIS or management accounts pack should carry — margins, debtor, creditor and inventory days, cash conversion cycle, current and quick ratio — with formulas.
- How do you calculate gross margin from a trial balance?(Revenue − direct costs) ÷ revenue × 100, with closing stock taken off direct costs. A worked example showing what the stock adjustment changes, and which ledgers count.
- MIS report format in Excel: what a monthly MIS should containThe monthly MIS report format used by Indian businesses, section by section: P&L summary, balance sheet, cash flow, ratios and ageing — with a worked example.
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