EBITDA Calculator
Calculate EBITDA and EBITDA margin from either direction.
What the EBITDA Calculator does
EBITDA is earnings before interest, tax, depreciation and amortisation. By stripping out financing and accounting decisions it approximates operating cash generation, which is why acquirers value businesses as a multiple of it.
Formula
Top-down: EBITDA = Revenue − COGS − Operating expenses (excluding D&A)Bottom-up: EBITDA = Net income + Interest + Taxes + Depreciation + AmortisationEBITDA margin = EBITDA ÷ Revenue × 100
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Calculation method | one of 2 options | Yes | — |
| Revenue | selected currency | Yes | Accepts more than 0. |
| Cost of goods sold | selected currency | Optional | Accepts 0 or more. Shown Calculation method is From revenue and expenses. |
| Operating expenses (excluding D&A) | selected currency | Optional | Accepts 0 or more. Shown Calculation method is From revenue and expenses. |
| Net income | selected currency | In some modes | Accepts 0 or more. Shown Calculation method is From net income. |
| Interest | selected currency | Optional | Accepts 0 or more. Shown Calculation method is From net income. |
| Taxes | selected currency | Optional | Accepts 0 or more. Shown Calculation method is From net income. |
| Depreciation | selected currency | Optional | Accepts 0 or more. |
| Amortisation | selected currency | Optional | Accepts 0 or more. |
| Valuation multiple | × | Optional | Optional — estimates enterprise value. Accepts 0 or more. |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Calculation method and Currency.
- Enter Revenue.
- Fill in the remaining inputs the form shows for your choice.
- Optionally add Depreciation, Amortisation and Valuation multiple.
- Select Calculate.
Worked example
$5,000,000 revenue, $2,000,000 COGS, $2,100,000 operating expenses, $300,000 D&A.
- Revenue
- 5000000
- COGS
- 2000000
- Opex
- 2100000
- Depreciation
- 300000
EBITDA $900,000 — an 18% margin. EBIT is $600,000 after D&A.
Frequently asked questions
Why do investors use EBITDA?
It allows comparison between companies with different debt levels, tax positions and asset bases. It is also the standard basis for acquisition multiples.
What is the criticism of EBITDA?
It ignores the real cost of maintaining assets. For capital-intensive businesses, depreciation reflects genuine future spending, and adding it back overstates sustainable earnings.