EBITDA Calculator
Free EBITDA calculator: add interest, taxes, depreciation, and amortization back to net income to get EBITDA and EBITDA margin for your business fast.
Bottom line from the P&L. Can be negative.
Income taxes only - not payroll or sales taxes.
Optional - enables the EBITDA margin. Enter 0 to skip.
Results
EBITDA
$250,000
- EBITDA margin
- 20.8%
Your $250,000 of EBITDA on $1,200,000 of revenue is a 20.8% EBITDA margin - the operating-cash-generation figure buyers and lenders typically anchor valuation multiples to.
Free and instant - nothing is stored or sent. Estimates for planning purposes, not accounting, tax, or investment advice.
EBITDA - earnings before interest, taxes, depreciation, and amortization - is the most quoted measure of a business’s operating earnings power. It strips out financing choices (interest), jurisdiction (taxes), and accounting for past investments (D&A) to show what the operations themselves generate.
It matters most when your business is being valued: small-business sales, lender covenants, and private-equity multiples are routinely expressed as a multiple of EBITDA. This calculator builds it from the net income line up.
What EBITDA measures
EBITDA = net income + interest + taxes + depreciation + amortization. Each add-back removes a cost that says more about structure than operations: interest reflects how the business is financed, taxes reflect where and how it is organized, and D&A reflects investments already made.
With the defaults - $150,000 of net income plus $20,000 interest, $45,000 taxes, and $35,000 of D&A - EBITDA is $250,000. Against $1,200,000 of revenue, that is a 20.8% EBITDA margin.
Where EBITDA is used - and where it misleads
Valuation and lending run on EBITDA: small businesses commonly trade at a single-digit multiple of it, and loan covenants are often set as debt-to-EBITDA limits. It makes businesses with different debt loads and tax situations comparable.
But EBITDA is not cash flow. It ignores capital expenditure, working-capital swings, and the very real obligation to pay interest and taxes. A capital-intensive business can post strong EBITDA while consuming cash every month - which is why buyers also inspect free cash flow.
How to interpret the result
EBITDA margin (EBITDA ÷ revenue) is the comparable figure across businesses of different sizes. Norms vary by industry; what buyers consistently reward is stability and growth of the margin over multiple years, plus clean books that survive due diligence.
If you are preparing for a sale or a loan, compute EBITDA the same way every month and document any owner add-backs (above-market owner salary, one-time items) separately - adjusted EBITDA claims are the first thing diligence teams test.
Frequently asked questions
How do you calculate EBITDA?
Start from net income and add back interest expense, income taxes, depreciation, and amortization: EBITDA = net income + interest + taxes + D&A. For example, $150,000 net income + $20,000 + $45,000 + $35,000 = $250,000 of EBITDA.
Is EBITDA the same as cash flow?
No. EBITDA excludes capital expenditures, changes in working capital, and actual interest and tax payments - all real uses of cash. A business can show positive EBITDA and negative operating cash flow simultaneously, especially while growing receivables or inventory.
What is a good EBITDA margin?
It varies by industry: software businesses commonly run 20–40% at maturity, services 10–25%, and distribution far thinner. More telling than the level is the trend - a stable or expanding margin over several years is what lenders and buyers reward.
What is adjusted EBITDA?
EBITDA with one-time or owner-specific items added back - above-market owner compensation, personal expenses run through the business, litigation costs, and other non-recurring items. It is standard in small-business sales, but every adjustment must be documented because buyers verify each one.
Keep going
Want these numbers computed automatically?
Fintra keeps runway, margins, and unit economics live on your dashboard - straight from your books.
Stay in the loop
One practical finance briefing a week - new tools, guides, checklists, and benchmarks.