Finance tools
EBITDA calculator
Free EBITDA calculator and ebitda formula tool for US small businesses and analysts. Learn how to calculate EBITDA from net income add-backs or operating profit (EBIT) + depreciation and amortization, see live EBITDA margin % when you enter revenue, and export CSV or PDF — no sign-up. For product-level gross margin, use our profit margin calculator.
What is EBITDA?
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It approximates how much operating profit a company generates before financing decisions, tax strategies, and non-cash depreciation and amortization.
What does EBITDA tell you? It highlights core operating performance — how much the business earns from day-to-day operations before capital structure (interest), tax planning, and accounting non-cash charges. Lenders, investors, and operators use it to compare companies with different debt levels or tax situations.
EBITDA is widely used in management reporting, lending, and valuation because it can make companies easier to compare when capital structures or accounting policies differ. It is not the same as net income, operating cash flow, or free cash flow.
This calculator focuses on standard EBITDA from your inputs — not adjusted EBITDA with one-time add-backs (see FAQ).
From net income
Add back interest, taxes, depreciation, and amortization to net income.
From operating profit
Add depreciation and amortization to EBIT when you already have operating profit.
EBITDA margin
Enter revenue to see EBITDA ÷ revenue as a percentage.
CSV/PDF export
Download inputs, breakdown steps, and results without sign-up.
Related tools: profit margin calculator, break-even calculator, ROA calculator, WACC calculator, and intrinsic value calculator.
What each part of EBITDA means
The ebitda formula adds back five items. Here is what each component represents on a typical income statement:
| Component | What it is | Why it is added back |
|---|---|---|
| Interest | Cost of debt financing | Removes capital-structure differences so operating performance is comparable |
| Taxes | Income tax expense | Tax rates and strategies vary by entity and jurisdiction |
| Depreciation | Non-cash allocation of tangible asset cost (PP&E) | No cash leaves the business in the current period |
| Amortization | Non-cash allocation of intangible asset cost | Same logic as depreciation — accounting charge, not a cash outflow today |
Amortization in EBITDA is not a separate cash payment — it spreads the cost of intangibles (patents, software, customer lists) over time. Pull D&A from your cash flow statement if your P&L does not show them as separate lines.
EBITDA formulas
Two common EBITDA formulas
EBITDA = Net income + Interest + Taxes + Depreciation + Amortization
EBITDA = Operating profit (EBIT) + Depreciation + Amortization
Both paths should yield the same EBITDA when your income statement is consistent. Use the path that matches the line items you have handy.
How to calculate EBITDA
Choose your starting point
Use net income plus interest, taxes, depreciation, and amortization — or operating profit (EBIT) plus D&A. Pick the path that matches the line items on your P&L.
Enter the line items
Use figures from the same reporting period (month, quarter, or year). On the net income path, add back interest and taxes paid — not just operating expenses.
Optional: revenue and industry
Enter revenue in the advanced panel to calculate EBITDA margin %. Select an industry for indicative benchmark context.
Read EBITDA and export
Review the step breakdown, margin, and interpretation. Copy results or export CSV/PDF for your model — no Excel download required.
EBITDA margin
EBITDA margin expresses EBITDA as a share of revenue:
EBITDA margin (%) = EBITDA ÷ Revenue × 100
For every dollar of revenue, margin shows how many cents become EBITDA before interest, taxes, and non-cash D&A. A 20% EBITDA margin means $0.20 of EBITDA per $1.00 of revenue — strong in many industries, but context matters (see benchmarks below).
Margin helps you compare operating efficiency across companies of different sizes. It can be negative when EBITDA is negative. It is still not a cash flow metric — capital expenditures and working capital are excluded.
How to calculate EBITDA from revenue
If you do not have operating profit on hand, you can build it from the top of the income statement:
Operating profit (EBIT) = Revenue − COGS − Operating expenses
EBITDA = Operating profit + Depreciation + Amortization
In this calculator, switch to From operating profit, open the advanced panel, and enable Revenue build to enter revenue, COGS, and operating expenses — then add D&A for EBITDA and margin.
EBITDA vs EBIT, net income, and cash flow
Net income is the bottom line after all expenses, including interest, taxes, and non-cash charges.
Operating profit (EBIT) includes depreciation and amortization as operating expenses. EBITDA adds D&A back to EBIT, so EBITDA ≥ EBIT when D&A are non-negative.
EBIT vs EBITDA: EBIT is GAAP operating income; EBITDA is a non-GAAP proxy that strips non-cash D&A to compare operating cash generation potential.
Cash flow reflects actual cash movements, including capex and working capital. EBITDA ignores those — treat it as an operating proxy, not liquidity.
What is a good EBITDA margin?
There is no single “good” EBITDA margin for every business. Compare within the same industry and track trends over time. Many analysts use rough rules of thumb: below 10% often signals pressure; 10%–20% is healthy in many sectors; above 20% can be strong — if sustainable.
| Industry (indicative) | Typical EBITDA margin | Notes |
|---|---|---|
| Manufacturing | 10%–15% | Cycle and subsector variance |
| Retail | 5%–12% | Gross margin drives spread |
| Technology | 15%–30% | Software vs hardware differs |
| Professional services | 12%–25% | Often asset-light |
| Healthcare | 8%–18% | Payer mix matters |
A margin of ~12% may be strong in one sector and weak in another. Use industry context and your own history — not a universal rule.
Limitations of EBITDA
EBITDA is a non-GAAP measure. It excludes capital expenditures, debt service, and changes in working capital — so high EBITDA does not guarantee strong cash generation.
Critics note that ignoring capex can overstate performance for asset-heavy businesses. EBITDA also allows management discretion in adjusted variants — this tool uses standard EBITDA only.
Use EBITDA alongside net income, cash flow statements, and balance-sheet metrics. Do not rely on EBITDA alone for investment or credit decisions.
EBITDA in business valuations
EBITDA is common in M&A and lending because it approximates operating earnings before financing and non-cash accounting. Analysts often compare enterprise value (EV) to EBITDA multiples within an industry — higher multiples usually imply stronger growth or lower risk expectations.
This page is an EBITDA calculator, not a valuation model. Use your EBITDA output as an input to broader analysis alongside cash flow, growth, and risk — or pair with our intrinsic value calculator for equity-oriented frameworks.
EBITDA worked example
Suppose net income is $100,000, interest $20,000, taxes $30,000, depreciation $10,000, and amortization $5,000:
EBITDA = 100,000 + 20,000 + 30,000 + 10,000 + 5,000 = $165,000
With revenue of $500,000, EBITDA margin = 165,000 ÷ 500,000 × 100 = 33%. Load the Bench example preset in the calculator to reproduce this result.
EBITDA in Excel
Build a simple EBITDA calculator in Excel without a template download:
Net income path: =B2+B3+B4+B5+B6 where B2–B6 are net income, interest, taxes, depreciation, and amortization.
EBIT path: =B7+B5+B6 where B7 is operating profit (EBIT).
EBITDA margin: =EBITDA_cell/Revenue_cell — format the cell as percentage.
Prefer no spreadsheet setup? Use this free calculator and export CSV or PDF to paste into your model.
How to use this EBITDA calculator
Select From net income or From operating profit, enter your figures, and review the live breakdown. Open the advanced panel to build operating profit from revenue or to set an industry benchmark for margin context.
Results are illustrative only — confirm material figures with your accountant or audited financial statements.
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Frequently asked questions about this EBITDA calculator
How do you calculate EBITDA?
Add interest, taxes, depreciation, and amortization back to net income, or add depreciation and amortization to operating profit (EBIT). Both formulas are built into this calculator.
What is the EBITDA formula?
EBITDA = Net income + Interest + Taxes + Depreciation + Amortization, or EBITDA = Operating profit + Depreciation + Amortization.
Is EBITDA based on profit or revenue?
EBITDA is profit-based — it starts from net income or operating profit. EBITDA margin divides EBITDA by revenue to express efficiency as a percentage.
What is EBITDA margin and how do you calculate it?
EBITDA margin = EBITDA ÷ Revenue × 100. Enter revenue in the advanced panel to see margin automatically.
What is a good EBITDA margin?
It varies by industry. Compare peers in the same sector and track improvement over time — there is no universal “good” percentage.
Is 12% EBITDA good?
12% EBITDA margin can be healthy in capital-light services but low for some software models. Always judge relative to industry norms and your own trend line.
Can EBITDA be negative?
Yes. When core operations lose money before add-backs, EBITDA can be negative — a signal to review pricing, costs, or volume.
How is EBITDA different from operating income?
Operating income (EBIT) includes depreciation and amortization. EBITDA adds those non-cash charges back, so EBITDA is always ≥ EBIT when D&A are non-negative.
What is adjusted EBITDA?
Adjusted EBITDA removes one-time or non-recurring items (restructuring, stock compensation, etc.). This calculator uses standard EBITDA only — adjusted add-backs are planned for a future update.
How do I calculate EBITDA in Excel?
Sum net income, interest, taxes, depreciation, and amortization in one cell (=B2+B3+B4+B5+B6), or sum EBIT plus D&A. For margin, divide EBITDA by revenue and format as percentage.
Or use this calculator and export CSV/PDF instead of building an Excel template.
What does EBITDA tell you about a company?
EBITDA shows how much operating profit the core business generates before interest, taxes, and non-cash D&A — useful for comparing operations when capital structures or tax situations differ.
What does a 20% EBITDA margin mean?
A 20% EBITDA margin means $0.20 of EBITDA for every $1.00 of revenue. That is often considered strong in many industries, but compare to peers in the same sector and your own trend.
Can EBITDA margin be negative?
Yes. When EBITDA is negative, margin is negative too — core operations are not covering operating costs before financing and D&A add-backs.
What should my EBITDA percentage be?
There is no universal target. Use industry benchmarks, your historical margin, and whether you are improving over time. Many analysts treat 10%+ as a baseline health signal, with 20%+ strong in several sectors.
Why is EBITDA used in valuations?
EBITDA approximates operating earnings before financing and non-cash charges, so EV/EBITDA multiples help compare companies in the same industry. It is one input — not a substitute for cash flow analysis.
How do I calculate EBITA?
EBITA (Earnings Before Interest, Taxes, and Amortization) adds back amortization only — not depreciation. EBITDA adds back both depreciation and amortization. Most US calculators, including this one, use the full EBITDA formula.