If you know EBITDA, EBIT, and Amortization, how do you compute Depreciation using the given relation?

If you know EBITDA, EBIT, and Amortization, how do you compute Depreciation using the given relation?

• A. Depreciation = EBITDA - Amortization - EBIT.
• B. Depreciation = EBITDA - EBIT - Amortization.
• C. Depreciation = EBIT - EBITDA - Amortization.
• D. Depreciation = EBITDA - EBIT + Amortization.

Answer: (B)

Start from the standard relationship: EBITDA = EBIT + Depreciation + Amortization. This means both depreciation and amortization are the non-cash charges added back to EBIT to arrive at EBITDA. To isolate Depreciation, rearrange by subtracting EBIT and Amortization from EBITDA: Depreciation = EBITDA − EBIT − Amortization. This form directly removes the two non-cash costs from EBITDA to reveal the depreciation amount. If you tried a different arrangement, you’d still be subtracting those same two items, but the clear, conventional way to present it is EBITDA minus EBIT minus Amortization.

Start from the standard relationship: EBITDA = EBIT + Depreciation + Amortization. This means both depreciation and amortization are the non-cash charges added back to EBIT to arrive at EBITDA. To isolate Depreciation, rearrange by subtracting EBIT and Amortization from EBITDA: Depreciation = EBITDA − EBIT − Amortization.

This form directly removes the two non-cash costs from EBITDA to reveal the depreciation amount. If you tried a different arrangement, you’d still be subtracting those same two items, but the clear, conventional way to present it is EBITDA minus EBIT minus Amortization.