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Updated almost 5 years ago on . Most recent reply
Calculating Amortization for EBITDA
I was trying to determine the unlevered free cash flow for a property and was wondering how to determine the amortization that you are suppose to add back into the equation. Below is the equation.
Unlevered free cash flow = earnings before interest, tax, depreciation, and amortization - capital expenditures - working capital - taxes
I was able to obtain all the information but wasn't sure what the amortization was referring to? Total principal and interest paid in a year?
Thank you for any help!
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#2 Land & New Construction Contributor
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Originally posted by @Daniel Grandfield:
I was trying to determine the unlevered free cash flow for a property and was wondering how to determine the amortization that you are suppose to add back into the equation. Below is the equation.
Unlevered free cash flow = earnings before interest, tax, depreciation, and amortization - capital expenditures - working capital - taxes
I was able to obtain all the information but wasn't sure what the amortization was referring to? Total principal and interest paid in a year?
Thank you for any help!
First you do not include CapEx in determining NOI or EBITDA. You can and should include reserve amounts set aside but not the actual expenses.
Yes amortization is the debt service or principle and interest.