This workout asks us to calculate both EBIT and EBITDA We've been given an income statement extract here and our starting point is going to be operating profit Operating profit though might include some non-recurring items So underneath the income statement, what do we see? Well we've got depreciation and amortization of 6,702 and we've got an extra note, non-recurring restructuring expense in SG&A So we start off with our operating profit 13,819 And now I want to say "hmmm, were there any other non-recurring items that shouldn't have been there"? And there was! There was the restructuring expense in SG&A Well I need to work out, what do I need to do to that If that is a restructuring expense, then that made SG&A go up And it made operating profits smaller If it made operating profit smaller but I want to reserve it out. Then I want to add it back, I want to make operating profit thus bigger So add back the 2,096 and what we now get to is EBIT. And our EBIT is the sum of the two items above, 15,915 However we still need to work out EBITDA, so we add back depreciation and amortization as well 6,702 And that will get us EBITDA. I sum the two items above EBIT and depreciation and amortization And that now gets us EBITDA, 22,617