EBITDA Calculator

Calculate Earnings Before Interest, Taxes, Depreciation, and Amortization β€” the most widely used measure of operating cash flow.

EBITDA

$8.00L

EBITDA MARGIN

40%

NET INCOME

$5.00L

Formula: $5.00L + $50.00K + $1.50L + $80.00K + $20.00K = $8.00L

πŸ’‘ Understanding EBITDA β€” The Universal Profitability Metric

EBITDA strips out financing decisions (interest), tax jurisdictions (taxes), and accounting choices (depreciation and amortization) to reveal a company's core operating profitability. This makes it the most commonly used metric for comparing companies across industries, capital structures, and geographies.

The formula is: EBITDA = Net Income + Interest + Taxes + Depreciation + Amortization. EBITDA margin (EBITDA Γ· Revenue Γ— 100) benchmarks operating efficiency. Software companies often have 30–50% EBITDA margins, while retail operates at 5–15%. Higher margins indicate stronger pricing power and operational leverage.

A company with $500K net income, $50K interest, $150K taxes, $80K depreciation, and $20K amortization has EBITDA of $800K. On $2M revenue, that is a 40% EBITDA margin β€” excellent by most standards.

EBITDA Calculator FAQ

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