Financial Statement Calculation: Profitability Metrics Explained

Financial Statement Calculation Flow

The following outlines the calculation of key profitability metrics:

EBITDA Calculation

EBITDA =

• (1) Revenue
• +- (2) Changes in Inventories of Finished Goods and Work in Progress
• + (3+5+9+10) Other Operating Revenue
• - (4) Supplies
• - (6) Personnel Expenses
• - (7) Other Operating Expenses
• +- (11b) Results Arising from Fixed Assets

Operating Result Before Exceptional Items

Operating Result Before Exceptional Items =

• EBITDA
• - (8+11a) Amortization, Depreciation, and Impairment

EBIT Calculation

EBIT =

• Operating Result Before Exceptional Items
• +- (12+14+15+16) Returns on Financial Investments

EBT Calculation

EBT =

• EBIT
• - (13+15) Financial Expenses

Profit/Loss from Ordinary Activities (Net of Tax, Pre-Exceptional)

Profit/Loss from Ordinary Activities (Net of Tax, Pre-Exceptional) =

• EBT
• +- Income Tax on Ordinary Operations

Profit/Loss from Continuing Operations

Profit/Loss from Continuing Operations =

• Profit/Loss from Ordinary Activities (Net of Tax, Pre-Exceptional)
• +- Exceptional Income/Expenses
• +- Income Tax on Exceptional Income/Expenses

Profit/Loss for the Period

Profit/Loss for the Period =

• Profit/Loss from Continuing Operations
• +- (18-it) Adjustments for the Period

Detailed Components of Financial Calculations

1. Revenue Components

• Merchandise Sold (+)
• Prompt Payment Discounts (-)
• Sales Returns and Volume Discounts (-)

2. Changes in Inventories of Finished Goods and Work in Progress

• Increase in Inventories of Finished Goods and Work in Progress (+)
• Impairment Losses on Finished Goods (-)

3. Work Carried Out for Intangible Assets

• Work Carried Out by the Company for Intangible Assets (+)

4. Supplies

• Merchandise Purchased (-)
• Subcontracted Work (-)
• Volume Discounts (+)
• Changes in Inventories of Merchandise (-)
• Reversal of Impairment of Raw Materials (+)

5. Other Operating Revenue (Part 1)

• Income from Lease Agreements (+)
• Income from Services to Personnel (+)
• Commission Income (+)
• Operating Grants Taken to Income (+)

6. Personnel Expenses

• Salaries and Wages (-)
• Social Security Payable by the Company (-)
• Long-Term Employee Benefits Payable Through Defined Benefit Schemes (-)
• Surplus Provisions for Employee Benefits (+)

7. Other Operating Expenses

• Research and Development Expenses (-)
• Independent Professional Services (-)
• Banking and Similar Services (-)
• Losses in Irrecoverable Trade Receivables (-)
• Impairment Losses on Trade Receivables (-)
• Other Operating Losses (-)
• Repairs and Maintenance (-)
• Reversal of Impairment of Trade Receivables (+)
• Leases (-)
• Insurance Premiums (-)
• Taxes (-)

8. Depreciation and Impairment (Part 1)

• Depreciation on Property, Plant, and Equipment (PPE) or Investment Property (-)

9. Other Operating Revenue (Part 2)

• Capital Grants, Donations, Bequests (+)

10. Other Operating Revenue (Part 3)

• Surplus Provisions for Taxes (+)

11. Fixed Asset Adjustments

11a. Impairment Adjustments for PPE

• Reversal of Impairment on PPE (+)
• Impairment Losses on PPE (-)

11b. Results Arising from Fixed Assets

• Losses/Gains on PPE Disposals (Net Effect)

12. Returns on Financial Investments (Part 1)

• Income from Debt Securities (+)
• Income from Current Loans (+)
• Dividends (+)

13. Financial Expenses (Part 1)

• Financial Expenses Arising from Provision Adjustments (-)
• Interest on Bonds and Obligations (Group Companies) (-)
• Interest on Discounted Bills and Factoring Transactions (-)

14. Returns on Financial Investments (Part 2)

• Losses on Fair Value Measurement of Financial Instruments (-)

15. Exchange Losses

• Exchange Losses (-)

16. Returns on Financial Investments (Part 3)

• Impairment Losses on Non-Current Loans to Third Parties (-)
• Gains on Current Investments and Debt Securities (Group Companies) (+)
• Losses on Transactions with Own Bonds (-)
• Gains on Non-Current Equity Holdings (+)
• Reversal of Impairment of Current Investments and Debt Securities (+)

17. Income Tax Components

• Current Tax (-)
• Deferred Tax (+)
• Positive Adjustments to Income Tax (+)