EBITDA Calculator: Measure Core Operating Profitability
Use the EBITDA calculator to strip out non-operating and non-cash items to reveal true business performance. Widely used in M&A, lending, and valuation.
"EBITDA is the closest thing to cash flow from operations before capital structure."
— Private Equity MD
How the EBITDA Calculator Works
Our EBITDA calculator follows the standard formula:
EBITDA = Net Income + Interest Expense + Income Taxes + Depreciation
+ Amortization
Alternative (top-down): Operating Income + D&A
Key Uses of EBITDA
- Valuation multiples (EV/EBITDA)
- Debt covenants (leverage, coverage ratios)
- M&A comparable analysis
- Credit underwriting
- Operational benchmarking
EBITDA vs Other Metrics
| Metric | Includes | Use Case |
|---|---|---|
| EBITDA | Before I, T, D, A | Valuation, leverage |
| EBIT | Before I, T | Operating profit |
| Net Income | After all | Owner earnings |
Real EBITDA Calculator Examples
- Net Income: $2M | +$0.3M Interest | +$0.8M Tax | +$0.5M D | +$0.2M A → EBITDA: $3.8M
- Operating Income: $3.1M | +$0.7M D&A → EBITDA: $3.8M (same result)
EBITDA Calculator Input Tips
- Use annual figures
- Include all depreciation (PP&E, leasehold)
- Include amortization of intangibles (goodwill, software)
- Net income can be negative
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