EBITA (SAP Business One)

EBITA stands for "earnings before interest, taxes and amortisation of intangible assets". It is a business indicator that measures the operating profitability of a company by taking into account the effects of the financing structure (interest), the tax burden and the amortisation of intangible assets. Depreciation on intangible assets are eliminated. The aim is to make the operating performance of companies comparable regardless of these factors, particularly within an industry with potentially different amortisation practices and tax systems.

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Importance in SAP Business One:

Although EBITA is not a standard key figure in SAP Business One, the data and tools required to calculate it can be used within the system. The relevant components include

Profit and loss account (P&L): Serves as the basis for determining the operating result (EBIT) or earnings before taxes (EBT).
Interest expenses: These are recognised in financial accounting and influence the result.
Amortisation of intangible assets (amortisation): The management and posting of this depreciation is mapped in the system.

Calculation in SAP Business One:

The calculation of EBITA in SAP Business One requires the identification of the relevant G/L accounts in the chart of accounts and the evaluation of the income statement. EBITA can be calculated in two ways:

EBITA = earnings before taxes (EBT) + interest expense + amortisation of intangible assets
EBITA = operating result (EBIT) + interest expense + amortisation of intangible assets

Implementation in SAP Business One:

SAP Business One offers various options for calculating and displaying EBITA:

User-defined queries: The query generator can be used to retrieve the required data from the financial accounting extracted and the calculation automated.
Key Performance Indicators (KPIs): In the Pervasive Analytics Designer, a KPI for EBITA can be created based on a customised query or an analytical view. This KPI widget can then be displayed in the cockpit or on dashboards.

Important note:

EBITA is not an official balance sheet indicator and can vary in its definition depending on the company. It should therefore not be viewed in isolation, but should always be analysed in the context of other key financial figures. The flexibility of SAP Business One enables companies to define and map this key figure individually.