In going from EBIT to EBITDA, we need to add back depreciation and amortization And here we've got a cash flow statement. The cash flow statement is always going to include depreciation and amortization So D and A (depreciation and amortization), always found in the cash flow statement That's really handy! So going from EBIT to EBITDA, just have a quick look in your cash flow statements But let's have a think, when I calculated EBIT, what kind of things did I add back? We added back non-recurring items such as impairments Now if I've already added back an impairment, I definitely don't want to do it again Let's imagine here that I've added back an impairment of 135, so my EBIT already has an impairment added back I'm now thinking, cool let's go from EBIT to EBITDA. Add back D and A, 4,016. Easy! However, D and A (depreciation and amortization) often includes hidden impairments Instead of saying depreciation and amortization, it should really sometimes say depreciation and amortization and impairments Let's check the footnotes I'm worried about that 4,016. I'm worried what might be included within it So if we look into the footnotes, we find depreciation is 2,968 Amortization is 913 And an impairment of 135, if you add it all up comes to the 4016 No way, the depreciation and amortization in the cash flow statement of 4016, secretly has an iimpairment 135 in it! Now going back to EBIT and EBITDA I already added back the impairment in calculating EBIT When going from EBIT to EBITDA, I must make sure not to add back the impairment again So in going from EBIT, I'll add back the depreciation 2,968 I'll add back the amortization 913 and that's it So do be wary, do be very wary guys. If you've added back an impairment, it may be hidden in the D and A in the cash flow statement