how to calculate the ebitda to sales ratio
ebitda is an abbreviation for earnings before interest taxes depreciation and amortization thus it is calculated adding back these line items to net income and so does include operating expenses such as the cost of goods sold cogs and selling general and administrative sg a expenses the ebitda sales ratio is therefore able to focus on the impact of direct operating costs while excluding the effects of the company s capital structure tax exposure and accounting quirks 