Finance
EBITDA Calculator
Calculate EBITDA from net income plus interest, taxes, depreciation, and amortization — and EBITDA margin when revenue is entered.
Enter figures from the same income statement period. Revenue is optional and only used for margin.
Enter your values
Bottom-line profit for the period. May be negative.
Optional. Enter revenue to also calculate EBITDA margin.
Results
EBITDA
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Enter net income and the four add-backs.
Total add-backs
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Interest, taxes, depreciation, and amortization combined.
Net income
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The starting point for the calculation.
Results are estimates based on the values entered and are provided for general planning.
Method
How to calculate EBITDA
EBITDA rebuilds an earnings figure by starting at net income and adding back the four items its name describes: interest, taxes, depreciation, and amortization. The intent is a view of operating performance that is less affected by capital structure, tax position, and historical asset purchases — which is why it is used to compare businesses that finance and depreciate differently.
Formula
EBITDA = Net income + Interest + Taxes + Depreciation + Amortization EBITDA margin = EBITDA ÷ Revenue × 100
Assumptions
- All figures come from the same income statement and the same period.
- Net income may be negative; the four add-backs are entered as positive expense amounts.
- This is the simplified bottom-up calculation, not an adjusted or normalised EBITDA.
- EBITDA margin requires revenue above zero and is omitted when revenue is left blank.
EBITDA and margin are calculated at full precision before display. Currency displays two decimals; margin displays two decimals.
How to interpret the result
EBITDA is not cash flow, not profit, and not a valuation. It ignores interest that must actually be paid, tax that is actually owed, working capital movements, and the capital spending needed to replace the assets whose depreciation was added back. A capital-intensive business can show strong EBITDA and still consume cash every year. Read it alongside net income and cash flow rather than in place of them.
Why the four items are added back
Interest reflects how a business is financed rather than how it operates. Taxes reflect jurisdiction and structure. Depreciation and amortization are non-cash allocations of purchases made in earlier periods.
Removing all four produces a figure that is easier to compare across businesses — and that is also the reason it can mislead, because for many businesses those costs are real, recurring, and unavoidable.
Where EBITDA breaks down
The weakest assumption is that depreciation is not a real cost. For a business running trucks, machinery, or kitchens, assets wear out and must be replaced with actual cash.
EBITDA is most defensible when comparing two similar businesses with different debt loads, and least defensible when used alone as a proxy for how much cash a business generates.
EBITDA compared with nearby measures
Each measure removes a different set of costs.
| Measure | Formula | What it shows |
|---|---|---|
| Gross profit | Revenue − COGS | Performance before all operating expenses. |
| EBITDA | Net income + I + T + D + A | Operating earnings before financing, tax, and non-cash charges. |
| Net income | Revenue − All costs | What actually remains after every cost, including interest and tax. |
Frequently asked questions
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