Calculate EBITDA and EBITDA margin from your income statement.
Calculated instantly in your browser.
How is EBITDA calculated?
EBITDA = net income + interest + taxes + depreciation + amortization, and EBITDA margin = EBITDA ÷ revenue × 100. It approximates operating cash earnings by removing capital structure and non-cash charges. For example, net income of $100k plus $20k interest, $30k taxes, $15k depreciation and $5k amortization is $170k EBITDA — a 34% margin on $500k revenue.
Understanding your result
EBITDA approximates operating cash earnings by removing the effects of capital structure (interest), tax rates and non-cash charges (depreciation and amortization), making it easier to compare core performance.
Formula and method
EBITDA = net income + interest + taxes + depreciation + amortization. EBITDA margin = EBITDA ÷ revenue × 100.
Assumptions and limitations
EBITDA here adds back the figures you supply and gives a margin, but it is a non-standard measure with no single accepted definition. It excludes real costs like capital spending, working-capital needs and debt service, so it can flatter a business. Use it alongside cash flow and profit, not on its own.
Worked example
Net income $100k plus $20k interest, $30k taxes, $15k depreciation and $5k amortization is $170k EBITDA — a 34% margin on $500k revenue.
How to use this tool
- Enter net income.
- Add interest, taxes, depreciation and amortization.
- Optionally add revenue for the margin.
Common mistakes to avoid
- Treating EBITDA as actual cash flow — it ignores working capital and capital spending.
- Leaving out a real add-back like amortization.
About the EBITDA Calculator
The EBITDA Calculator works out earnings before interest, taxes, depreciation and amortization from your net income, and the EBITDA margin against revenue.
Who should use this tool
Business owners, analysts and investors measuring operating performance.
Benefits
- EBITDA from the income-statement lines.
- EBITDA margin when you add revenue.
- Clear add-back breakdown.
- Instant and private.
Practical use cases
- Comparing operating profitability between companies.
- Valuing a business on an EBITDA multiple.
- Stripping out financing and accounting effects.
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Frequently asked questions
Why add back depreciation and amortization?
They are non-cash accounting charges. Adding them back shows operating earnings before these allocations, which aids comparison.
Is EBITDA the same as profit?
No. It is a measure of operating performance, not net profit or cash flow — it excludes interest, taxes and non-cash charges.
Why can EBITDA overstate how a business is doing?
By stripping out interest, tax, depreciation and amortization, EBITDA ignores genuine costs such as replacing equipment and servicing debt. A company can show strong EBITDA yet struggle for cash. It is a useful comparison of core operations, but read it with free cash flow and net profit.