Cause of Change What causes the change from the revenue to EBITDA to Net Profit? Observing the movement on the chart below will help you understand the cause of change. Below are the explanations and calculations for each step depicted on the chart: Revenue • Revenue, also known as sales or turnover, is the total amount of money a company generates from its primary business activities. COGS • COGS refers to the direct costs associated with producing or manufacturing the goods or services that a company sells. Gross Profit • Gross Profit is the amount of money a company has left after subtracting the direct costs of producing its goods or services (COGS) from its total revenue. • GP = Revenue – GOGS OPEX • OPEX are a company’s ongoing costs to operate its business. Include items such as rent, utilities, salaries, and marketing expenses. Other Income • Other Income refers to revenue generated by a company that is not directly related to its core business operations. This can include income from investments, interest, or other sources outside the company's primary activities. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) • EBITDA is a measure of a company's operating performance. It excludes interest, taxes, and non-cash expenses like depreciation and amortization. • EBITDA = GP – OPEX + Other Income EBIT (Earnings Before Interest & Taxes) • Depreciation and amortization are non-cash expenses that represent the allocation of the cost of tangible and intangible assets over time. • EBIT = EBITDA – Depreciation EBT (Earnings Before Taxes) • Interest expenses represent the cost of borrowed funds. Subtract interest from the Adjusted EBITDA. • EBT = EBIT – Interest Expense Net Profit • Subtract taxes from Earnings Before Taxes to arrive at Net Profit. • Net Profit = Earnings Before Taxes - Taxes Fuente: Abdul Khaliq, LinkedIn