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EBITDA Calculator

Calculate EBITDA from net income, interest, taxes, depreciation and amortization — plus the EBITDA margin against revenue.

Net income

Interest expense

Taxes

Depreciation

Amortization

Revenue (for margin)

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How it works

EBITDA = net income + interest + taxes + depreciation + amortization · EBITDA margin = EBITDA ÷ revenue × 100

EBITDA — earnings before interest, taxes, depreciation and amortization — starts from net income and adds back the four items in its name. Interest and taxes are added back because they depend on financing and jurisdiction rather than core operations; depreciation and amortization are added back because they are non-cash accounting charges. The result approximates operating cash generation and lets you compare companies with different debt loads and tax situations. The EBITDA margin expresses it as a share of revenue.

Worked example

A company with $500,000 net income, $50,000 interest, $100,000 taxes, $80,000 depreciation and $20,000 amortization has EBITDA of 500,000 + 50,000 + 100,000 + 80,000 + 20,000 = $750,000. On $2,000,000 revenue, that is a 37.5% EBITDA margin.

Frequently asked questions

Why add back interest and taxes?

Interest depends on how a company is financed and taxes depend on its jurisdiction — neither reflects the underlying operating performance. Stripping them out lets you compare two businesses on their core operations even if one carries more debt or sits in a higher-tax location.

Why are depreciation and amortization added back?

They are non-cash charges: the cash was spent when the asset was bought, and depreciation/amortization just spread that cost across later years on the income statement. Adding them back moves EBITDA closer to the cash the business actually generates from operations.

Is a higher EBITDA margin always better?

A higher margin generally signals stronger operating profitability, but EBITDA ignores real costs — capital expenditure, interest and taxes all still have to be paid. A capital-intensive business can show a healthy EBITDA margin yet generate little free cash flow, so read it alongside other measures.

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Educational estimate, not financial advice.