BYTETOOLS

EBITDA Calculator

Calculate EBITDA from net income or operating income, add back one-off costs for adjusted EBITDA, and get the margin plus an enterprise value at any multiple.

Add-backs for adjusted EBITDA

$1,530,000
EBITDA
18.00%
EBITDA margin
$1,665,000
Adjusted EBITDA
19.59%
Adjusted margin
LineAmount
Net income$760,000
+ Interest$140,000
+ Taxes$230,000
= EBIT$1,130,000
+ Depreciation$310,000
+ Amortisation$90,000
= EBITDA$1,530,000
+ Owner salary above market rate$90,000
+ One-off legal settlement$45,000
= Adjusted EBITDA$1,665,000

Enterprise value at a multiple

$9,990,000
Enterprise value
$8,790,000
Implied equity value
1.18×
EV / revenue

EBITDA = net income + interest + taxes + depreciation + amortisation, or equivalently operating income + D&A  ·  margin = EBITDA ÷ revenue  ·  EV = adjusted EBITDA × multiple  ·  equity value = EV − net debt

Worked example: $1,000,000 net income plus $200,000 interest, $300,000 taxes, $400,000 depreciation and $100,000 amortisation gives $2,000,000 of EBITDA. On $10,000,000 of revenue that is a 20% margin, and at a 6× multiple the enterprise value is $12,000,000.

EBITDA strips out financing and accounting choices so two companies can be compared on operations alone — but it also strips out real costs. It is not cash flow: it ignores working capital swings, capital expenditure and the interest you genuinely owe. Adjusted EBITDA is the most negotiable number in any deal, because every add-back is an argument that a cost will not recur; buyers routinely reject half of them. Both methods here give the same answer when your income statement is internally consistent, which makes them a useful cross-check. Everything is calculated in your browser and nothing is uploaded.

What is the EBITDA Calculator?

EBITDA strips financing and accounting choices out of profit so two businesses can be compared on operations alone.

  • Bottom-up and top-down methods that cross-check each other
  • Full line-by-line bridge from net income or EBIT through to adjusted EBITDA
  • Unlimited labelled add-backs for adjusted EBITDA
  • EBITDA margin and adjusted margin against revenue
  • Enterprise value at any multiple, plus implied equity value after net debt
  • Fully client-side — financial figures never leave your browser

How to use the EBITDA Calculator

  1. 1

    Choose whether to work bottom-up from net income or top-down from operating income.

  2. 2

    Enter revenue so the margin can be calculated, then the income figure for your chosen method.

  3. 3

    Add depreciation and amortisation, plus interest and tax if you are working from net income.

  4. 4

    List any add-backs with a label and an amount to build adjusted EBITDA.

  5. 5

    Set an EV/EBITDA multiple and your net debt to see enterprise and implied equity value.

About the EBITDA Calculator

EBITDA strips financing and accounting choices out of profit so two businesses can be compared on operations alone. This calculator builds it both ways — bottom-up from net income by adding back interest, tax, depreciation and amortisation, or top-down from operating income by adding back just depreciation and amortisation — and shows the full bridge as a line-by-line table.

Because the number that actually gets negotiated in a deal is adjusted EBITDA, you can add as many add-backs as you like, each with its own label: an owner's salary above market rate, a one-off legal settlement, a relocation cost. The tool totals them, recalculates the adjusted margin, and applies your chosen multiple to give an enterprise value and an implied equity value after net debt.

Both calculation methods should land on the same figure when your income statement is internally consistent, which makes switching between them a quick sanity check on your own numbers. Everything runs in your browser: revenue, profit, add-backs and debt figures are never uploaded, never stored, and there is no signup of any kind.

Frequently asked questions

How do you calculate EBITDA?

Start with net income and add back interest, taxes, depreciation and amortisation. Equivalently, take operating income and add back only depreciation and amortisation, since operating income already sits above interest and tax. Both routes should land on the same number if the income statement is consistent.

What is a good EBITDA margin?

It varies enormously by industry — software businesses can exceed 30% while grocery retail runs in low single digits. The useful comparison is against direct competitors of a similar size, and against your own margin last year. A margin in isolation says almost nothing.

What is the difference between EBITDA and adjusted EBITDA?

Adjusted EBITDA adds back costs the seller argues will not recur under new ownership: an above-market owner salary, a one-off lawsuit, a failed product launch. It is the most negotiated number in any deal, and buyers routinely reject a good share of the add-backs presented to them.

Is EBITDA the same as cash flow?

No, and treating it as such is a classic mistake. EBITDA ignores working capital movements, capital expenditure and the interest you genuinely have to pay. A capital-intensive business can post healthy EBITDA while burning cash every single month.

How is enterprise value calculated from EBITDA?

Multiply EBITDA — usually the adjusted figure — by a market multiple for your sector and size. That gives enterprise value, the value of the business itself. Subtract net debt, which is total debt minus cash, to get the implied equity value that shareholders would actually receive.

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