EBITDA Calculator (and EBITDA Margin)
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EBITDA Calculator (and EBITDA Margin) by TheCalcTools
How the EBITDA Calculator (and EBITDA Margin) works
EBITDA adds back interest, taxes, depreciation and amortisation to net income, approximating cash profit from operations before financing and accounting choices.
It is widely used to compare companies and in valuation multiples, but it ignores capital spending and working capital, so it is not the same as cash flow.
The formula
Worked example
Using the default values shown in the calculator:
| Revenue | $5e+06 |
|---|---|
| Net income | $420000 |
| Interest expense | $80000 |
| Income taxes | $140000 |
| Depreciation | $210000 |
| Amortisation | $50000 |
| Enterprise value (optional) | $9e+06 |
- 420,000 + 80,000 + 140,000 + 210,000 + 50,000 = $900,000 EBITDA.
- Margin 18.0%; at a 9,000,000 enterprise value the multiple is 10.00×.
Result:
| EBITDA | $900,000 |
|---|---|
| EBIT (operating profit) | $640,000 |
| EBITDA margin | 18.0% |
| EV / EBITDA multiple | 10.00 |
Frequently asked questions
Is EBITDA a GAAP measure?
No. It is a non-GAAP measure; companies that report it must reconcile it to net income.
Sources and further reading
- Wikipedia: Earnings before interest, taxes, depreciation and amortization
- Investor.gov (SEC): Beginners' guide to financial statements
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This calculator gives estimates for information only. Check important results independently before you rely on them. See our disclaimer.
