EBITDA approximates operating cash earnings and is widely used in valuation (EV/EBITDA) and loan covenants. It ignores capital expenditure, so it can flatter capital-intensive businesses.
How to use the EBITDA Calculator
- Net income
- Interest expense
- Taxes
- Depreciation
- Amortization
- Revenue
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter net income, interest, taxes, depreciation, amortization and revenue.
Tips
- Use consistent periods (a year or a quarter) for flow figures and period-end values for balances.
- Average opening and closing balances when a ratio mixes a flow with a stock.
- Benchmark against competitors in the same industry.
- Read the ratio together with others – profitability, liquidity and efficiency tell different stories.
Common mistakes to avoid
- Using sales instead of cost of goods sold for inventory ratios.
- Mixing gross, operating and net profit.
- Ignoring one-off items that distort a single year.
Inputs explained
| Field | What to enter |
|---|---|
| Net income | Amount in your currency |
| Interest expense | Amount in your currency |
| Taxes | Amount in your currency |
| Depreciation | Amount in your currency |
| Amortization | Amount in your currency |
| Revenue | Amount in your currency |
What each result means
- EBIT = [Net income] + [Interest expense] + [Taxes]
- EBITDA = [EBIT] + [Depreciation] + [Amortization]
- EBITDA margin = [EBITDA]÷[Revenue]×100
Example values
How the main result changes when Net income changes and everything else stays at the example values above:
| Net income | EBITDA |
|---|---|
| 75,000 | 215,000 |
| 112,500 | 252,500 |
| 150,000 | 290,000 |
| 187,500 | 327,500 |
| 225,000 | 365,000 |
| 300,000 | 440,000 |
Formula
EBITDA = net income + interest + taxes + depreciation + amortizationEBITDA = EBIT + depreciation + amortizationEBITDA margin = EBITDA ÷ revenueWorked example
Inputs — Net income: $150,000; Interest expense: $30,000; Taxes: $40,000; Depreciation: $60,000; Amortization: $10,000; Revenue: $1,000,000.
Results — EBIT = $220,000.00; EBITDA = $290,000.00; EBITDA margin = 29 %.
Frequently asked questions
What is EBITDA?
Earnings before interest, taxes, depreciation and amortization.
Why is EBITDA used?
It compares operating performance independent of financing, taxes and accounting for assets.
What are EBITDA's limitations?
It ignores capital spending and working capital needs.
What formula does the EBITDA Calculator use?
EBITDA = net income + interest + taxes + depreciation + amortization.