The formula
EBITDA = Revenue − Cost of Goods Sold (COGS) − Operating Expenses (OpEx). The "before interest, tax, depreciation and amortization" part of the name is handled by what's deliberately left out: interest, tax-related entries, and depreciation/amortization are tracked in separate buckets and excluded from this calculation by construction, rather than being added back after the fact.
Why look at EBITDA by region at all
A company-wide EBITDA number can look perfectly healthy while hiding a region that's actually losing money, propped up by a couple of strong ones. Splitting EBITDA by region (or by location, or cost center) turns one number into something you can act on: which specific region needs attention, rather than a vague sense that margins overall could be better.
The overhead-allocation decision
Here's the part that quietly changes every region's number: head-office and shared costs (overhead) have to be allocated to regions somehow, or left out entirely. How you allocate them -- by revenue share, by headcount, by a fixed rule per region -- directly moves each region's reported EBITDA margin up or down, even though the underlying regional performance hasn't changed at all. Two companies with identical regional performance can report very different per-region EBITDA simply because they allocate overhead differently.
This is why it matters to know which allocation rule a report is using before comparing regions against each other, and especially before comparing one period to another if the allocation rule changed in between.
Why unallocated overhead is shown separately
A well-built regional EBITDA report keeps unallocated overhead visible as its own line, rather than silently folding it into one region or spreading it invisibly across all of them. That way, the sum of every region's EBITDA plus unallocated overhead reconciles back to the company-wide total -- and you can see exactly how much of the company's cost base isn't attributed to any region at all.
Other ways to slice it
Region isn't the only useful cut. Location and cost-center views answer a related but different question -- and because a company's existing overhead-allocation rule is usually set up per-region specifically, a location or cost-center view is often shown unallocated (revenue − COGS − OpEx only, no overhead subtracted) rather than reusing a region-shaped allocation rule against a different dimension's categories, which would silently apply the wrong allocation to the wrong grouping.
How to actually read the report
- Check the company-wide total first, then confirm the regions (plus unallocated overhead) sum back to it.
- Sort by EBITDA margin, not absolute EBITDA -- a large region with thin margin and a small region with strong margin tell different stories.
- Know which overhead-allocation approach is in use before comparing regions, or comparing this period to a prior one.
- Treat an unallocated-overhead view (location/cost-center) as answering a different question than the region view, not a more detailed version of the same one.
This is one of the reports inside Finance Genie, alongside P&L, cash flow, balance sheet, AP/AR ageing and the rest of the finance report set -- all built from your own imported data.