EBITDA
$10,525.00
How it works
The EBITDA Calculator computes Earnings Before Interest, Taxes, Depreciation, and Amortization from a company's income statement — and calculates the EBITDA margin and commonly used valuation multiples. EBITDA is the most widely used proxy for operating cash flow in business valuation and lending.
EBITDA is the standard metric for comparing operational profitability across companies with different capital structures (debt levels), tax situations, and accounting choices for depreciation. Lenders use EBITDA multiples for leveraged buyout financing. M&A transactions are priced as N× EBITDA. This calculator extracts and interprets EBITDA from standard income statement inputs.
How to use it: enter Revenue, COGS, Operating Expenses, Interest, Taxes, Depreciation, and Amortization. The calculator derives EBITDA from the bottom up (Net Income + Interest + Taxes + D&A) and from the top down (Revenue − COGS − Operating Expenses excluding D&A).
Outputs: - EBITDA = Net Income + Interest + Taxes + Depreciation + Amortization - EBITDA Margin = EBITDA / Revenue × 100 - Enterprise Value at common multiples (5×, 7×, 10× EBITDA) - Debt capacity (typical lenders allow 4–5× EBITDA in senior debt)
Adjusted EBITDA: for M&A purposes, add-backs to EBITDA are common: owner compensation above market, one-time expenses (legal settlements, restructuring), and COVID-era PPP loans. The adjusted EBITDA field lets you enter normalized add-backs.
EBITDA by industry: SaaS software: 20–30% EBITDA margins, industrial manufacturing: 10–15%, retail: 5–10%, professional services: 15–25%.
Privacy: financial data runs in the browser.
Frequently Asked Questions
- EBITDA is an approximation of cash flow from operations, not true cash flow. It excludes working capital changes (a growing business that extends more credit has real cash outflows not in EBITDA), capex (maintaining the business requires ongoing capital investment), and interest payments (which are real cash costs). Critics note EBITDA can be manipulated by accelerating revenue recognition or delaying expenses within the accrual window.
- Adjusted EBITDA adds back one-time, non-recurring, or discretionary expenses to show normalized ongoing profitability. Common add-backs: owner's above-market salary (difference between what owner pays themselves vs. market-rate management salary), one-time legal settlements, COVID-related costs, restructuring charges. Buyers and sellers negotiate which add-backs are legitimate — adjusted EBITDA is always higher than reported EBITDA.
- Benchmarks vary widely: SaaS: 15–30%, professional services: 15–25%, manufacturing: 10–15%, retail: 5–10%, restaurants: 15–20%, healthcare: 10–20%. An EBITDA margin below 10% in most industries indicates a margin-thin business with little cushion for downturns. Negative EBITDA means the business is burning cash on core operations.
- Operating income (EBIT) = Revenue − COGS − Operating Expenses (including D&A). EBITDA adds back depreciation and amortization to EBIT: EBITDA = EBIT + D&A. The difference is significant for capital-intensive businesses (manufacturing, real estate, telecom) where D&A is large. For asset-light businesses (software, consulting), EBIT and EBITDA are close.