Post by account_disabled on Dec 28, 2023 5:57:51 GMT
The following calculation results for a company with an annual surplus of 1 million euros: Company 1: 1,000,000 EUROS ANNUAL SURPLUS + 250,000 euros Tax expense + 200,000 euros Interest expense + 800,000 euros Depreciation = 2,250,000 euros EBITDA - 100,000 euros extraordinary income = 2,150,000 euros adjusted EBITDA However, for a company with the same annual turnover but based in a country with a lower tax burden, the following calculation results: Company 2: 1,000,000 EUROS ANNUAL SURPLUS + 150,000 euros.
Tax expense + 50,000 euros Interest expense + 300,000 euros Depreciation = 1,500,000 euros EBITDA +/- 0 euros extraordinary income = 1500,000 euros adjusted EBITDA The second company therefore generates the same annual turnover, but has a significantly lower tax burden. Therefore, according to the C Level Contact List mathematical result, the first company would be attributed greater economic success, which is reflected in the higher EBITDA . How do companies increase EBITDA? There are various strategies that companies can use to increase their EBITDA. One possibility is to increase sales with proportional expense items.
Another strategy is to charge higher prices for the same products and services . material costs and other operational expenses. This way you increase your EBITDA without having to increase your prices. Last but not least, various companies are starting to reduce their personnel expenses . New production processes make it possible to increase production capacities with the same staff. On the other hand, if you maintain your production capacity but save on staff, you will also increase your EBITDA. EBITDA distortions EBITDA is not anchored in any legal text.
Tax expense + 50,000 euros Interest expense + 300,000 euros Depreciation = 1,500,000 euros EBITDA +/- 0 euros extraordinary income = 1500,000 euros adjusted EBITDA The second company therefore generates the same annual turnover, but has a significantly lower tax burden. Therefore, according to the C Level Contact List mathematical result, the first company would be attributed greater economic success, which is reflected in the higher EBITDA . How do companies increase EBITDA? There are various strategies that companies can use to increase their EBITDA. One possibility is to increase sales with proportional expense items.
Another strategy is to charge higher prices for the same products and services . material costs and other operational expenses. This way you increase your EBITDA without having to increase your prices. Last but not least, various companies are starting to reduce their personnel expenses . New production processes make it possible to increase production capacities with the same staff. On the other hand, if you maintain your production capacity but save on staff, you will also increase your EBITDA. EBITDA distortions EBITDA is not anchored in any legal text.