Earnings before interest, tax, depreciation, amortization. The EBITDA Calculator takes net income, interest expense, taxes, depreciation, amortisation, revenue and returns ebitda plus ebit, ebitda margin. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Margins tell you where the money goes between revenue and profit. Track each margin over time and against similar businesses; a falling margin while revenue grows is the signal to investigate. Use the worked example below to check the maths against your own figures.
How the EBITDA Calculator works
EBITDA adds back the costs that depend on financing, tax jurisdiction and accounting choices, leaving an operating cash-profit figure that is comparable between businesses and widely used in valuation multiples.
Worked example
With the example values (net income of $60,000, interest expense of $10,000, taxes of $20,000, depreciation of $25,000, amortisation of $5,000, revenue of $500,000), the ebitda is $120,000.00; ebit $90,000.00, ebitda margin 24%. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is ebitda calculated?
EBITDA = net income + interest + taxes + depreciation + amortisation.
Which figures do I need?
Net income, interest expense, taxes, depreciation, amortisation, revenue. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
What is a good margin?
It depends on the industry: grocery and distribution run on low single-digit net margins, software and services on 20% or more. Compare with similar businesses and watch your own trend.
