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EBITDA Calculator

Get EBITDA by adding back interest, taxes, depreciation and amortization.

How it is calculated

This tool works upward from the bottom line of the income statement. EBIT = Net income + Interest + Taxes and EBITDA = EBIT + Depreciation + Amortization. Each input is the expense recognised in the same period as the net income, and all five are required (type 0 for items you do not have). The tool reports EBIT as well, since it is the stage before depreciation and amortization are added back. Net income, interest and taxes may be negative: a net loss is entered as a negative number and a negative result is displayed as, for example, -$2,000.00. If you have net interest income, enter it as a negative interest figure. Depreciation and amortization cannot be negative; such an entry gives no result. Amounts are shown in US dollars.

Worked example

A company reports net income of 120,000. During the year it paid 15,000 in interest and 40,000 in income taxes. Adding these back gives EBIT: 120,000 + 15,000 + 40,000 = $175,000.00. Depreciation was 25,000 and amortization was 8,000, so EBITDA is 175,000 + 25,000 + 8,000 = $208,000.00. The 33,000 difference between EBIT and EBITDA is the non-cash charge for aging equipment and intangibles.

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Common mistakes

  • Leaving a field blank. All five fields are required, so a missing amortization gives no result; enter 0 if there is none.
  • Entering a loss as a positive number. Net income of minus 50,000 must carry the minus sign, or the tool will add 50,000 instead of subtracting it.
  • Entering interest income as an expense. Interest earned must be negative here, since it was added to net income and has to be taken out again.
  • Typing depreciation or amortization with a minus sign. These charges are added back and must be zero or positive; a negative value shows no result.
  • Treating EBITDA as cash flow. It leaves out capital spending, working capital and the cash taxes and interest actually paid.

About this calculator

EBITDA — Earnings Before Interest, Taxes, Depreciation, and Amortization — starts from a company's net income and adds back the expenses that vary most by capital structure and accounting choices: interest (which depends on how much debt a company carries), taxes (which depend on jurisdiction and tax strategy), and depreciation and amortization (non-cash accounting charges for wearing-down assets and intangibles).

Analysts and investors use EBITDA to compare the core operating performance of companies on a more level footing, since two businesses with identical operations can report very different net income just because one is more leveraged or depreciates assets faster. It's also a common input for valuation multiples (like EV/EBITDA) in M&A and equity analysis. This calculator takes net income, interest, taxes, depreciation, and amortization and adds them together to return EBITDA.

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