EBITDA

Operating profit with depreciation and amortisation added back. Because those two are non-cash charges, the result is a rough proxy for the cash the trading business throws off before capital spending, interest and tax.

Add the exporter's ₹380 crore of depreciation to its ₹960 crore of operating profit and EBITDA is ₹1,340 crore.

The measure earns its keep in capital-heavy industries where accounting depreciation and real economic wear diverge, and where comparing two firms with different asset ages is otherwise hopeless. Telecom, hotels and cement are read this way for good reason.

It also has a well-known failure. Depreciation is a real cost in the sense that the plant genuinely wears out and has to be replaced, so a company valued only on EBITDA is a company whose capital spending nobody has looked at. Charlie Munger's objection to the measure was blunt and it was correct.