Hi, I’m calculating EBITDA based on items found in the income statement (including depreciation/amortization) and Free Cash Flow (NI + Depreciation/Amortization - Change in Working Capital - Capital Expenditures) based on the cash flow statement for Limelight (LLNW). My issue is that the yearly depreciation/amortization shows up as different numbers in the year-end income statement and cash flow statement. What is the cause of this difference and which number should I use for depreciation/amortization in the EBITDA calculation and the FCF calculation? http://finance.google.com/finance?fstype=ii&q=NASDAQ:LLNW&hl=en Thanks!
Use Cash Flow Statement figures Theoretically, D&A in income statement should be same as that of on Cash flow statement, however, you can get different numbers in reality because some companies include depreciation as part of COGS for their core operation, and only report Dep for non-core e.g, office building/furniture in the income statement. CF statement is definitely more accurate and in any case it calculates the CFO . so you only have to look for any adjustment in that one ( Cash flow manipulation, if any through stretching of payables or selling of receivables, etc.). Hope it helps!
In calculating EBITDA, can I add back depreciation (from the cash flow statement) to EBIT to get EBITDA? As an alternative, can I add depreciation back to operating income to get a rough approximation for EBITDA? Thanks!
Check the actual SEC filings.