EBITDA = Net Income + Interest + Taxes + Depreciation + AmortizationIf a company has:$50 million in Revenue$10 million in Costs of Goods Sold (COGS)$15 million in Operating Expenses$5 million Depreciation and Amortization Expense$2 million in Interest Expense$3 million in TaxesNet Income = 50 - 10 - 15 - 5 - 2 - 3 = $15 millionEBITDA = $15 + 2 + 3 + 5= $25M
If operating income is $100,000 and the tax rate is 30%, then NOPAT is $100,000 * (1 - 30%) or $100,000 * .7, which is $70,000.