Adjusted EBITDA is calculated by starting with the net income and adding back interest, taxes, depreciation, and amortization (EBITDA). Then, you adjust for any non-recurring expenses, such as restructuring costs, legal settlements, or other one-time charges that aren't reflective of the company's ongoing operations. The formula can be summarized as: Adjusted EBITDA = Net Income + Interest + Taxes + Depreciation + Amortization + Non-recurring Expenses. This provides a clearer picture of a company's operational performance by excluding irregular costs.
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