The workout tells us for each period, calculate operating profit, EBIT and EBITDA for Tiff Toy Ltd. Assume other income is operating and recurring. You may want to pause the recording at this point and have a go on your own So we start with operating profit We see here a line "Operating income" That looks to me like it's definitely the operating profit, below that is interest So operating profit is going to start at 127,047.8 In the next year, a similar figure appears. I now go looking for any non-recurring items And I can see that there are some foot note information underneath this income statement We can see that the cost of sales includes write off costs, hmm interesting If that's been included in cost of sales, then that is increasing my cost of sales expense, reducing my operating profit I think that is a non-recurring item, I'm going to have to add that back So write off costs, add back those figures I now go looking for any other non-recurring items, I see here cost of sales includes distribution costs Distribution costs, that sounds very normal to me. Lots of companies will incur distribution costs as on-going expenses But the next line item, highly questionable "SG&A" selling general and admin costs, includes corporate restructuring expenses That's likely to be a one off item, so we're going to add that one back as well So if I take my operating profit and add on the write off costs and the corporate restructuring, we get to EBIT Now I need to go from EBIT to EBITDA and we've got depreciation and amortisation expenses provided So we add them in the next line items Add them onto the EBIT, to get to EBITDA And thus we now have our last EBITDA figure