EBITDA Calculator
Calculate EBITDA from revenue or net income, estimate enterprise value with industry multiples, or benchmark your EBITDA margin against sector averages. Works with any currency.
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How to Use This Calculator
Tab "Calculate EBITDA"
Choose between two methods. Top-down: enter your revenue, cost of goods sold (COGS), and operating expenses excluding depreciation and amortization. The calculator computes EBITDA as Revenue minus COGS minus OpEx. Bottom-up: enter net income, interest, taxes, depreciation, and amortization. EBITDA equals the sum of all five. Both methods produce the same result from consistent financial statements.
Tab "Valuation"
Enter your annual EBITDA and select an industry. The calculator applies the industry-standard multiple range and shows your estimated enterprise value. Override the multiple with a custom value if you have a specific comparable or offer in hand. The comparison table shows valuations across all industries for quick benchmarking.
Tab "EBITDA Margin"
Enter your EBITDA and revenue. The calculator shows your EBITDA margin as a percentage and compares it against benchmarks for Software, Manufacturing, Retail, Services, and Healthcare. Highlighted rows indicate where your margin falls within the industry range.
The Formulas
EBITDA = Revenue − COGS − Operating Expenses (excl. D&A)
EBITDA (bottom-up):
EBITDA = Net Income + Interest + Taxes + Depreciation + Amortization
Enterprise value:
EV = EBITDA × Multiple
EBITDA margin:
Margin = (EBITDA / Revenue) × 100%
All calculations are universal and pre-adjustment. No country-specific tax rates or accounting standards are applied. Results are estimates suitable for initial analysis and benchmarking.
Worked Examples
Example 1 — SaaS company, top-down: $2M revenue
A SaaS company with $2,000,000 in annual revenue, $800,000 in COGS (hosting, support staff), and $500,000 in operating expenses (sales, marketing, G&A) excluding depreciation and amortization.
A 35% EBITDA margin is strong for SaaS (industry range: 20–40%). This company is operationally efficient with healthy unit economics.
Example 2 — Bottom-up from net income
A mid-market company reports net income of $350,000. The CFO needs to calculate EBITDA for a potential buyer.
Starting from net income and adding back interest, taxes, and non-cash charges gives a clearer picture of operating cash flow for the buyer’s valuation model.
Example 3 — Manufacturing business valued at 5x EBITDA
A manufacturing company with $700,000 annual EBITDA is exploring a sale. The industry typically trades at 4–6x EBITDA.
The valuation range is $2.8M to $4.2M. A buyer offering $3.5M is paying the industry midpoint — a fair starting point for negotiations.
Understanding EBITDA
What Is EBITDA?
EBITDA — Earnings Before Interest, Taxes, Depreciation, and Amortization — is one of the most widely used financial metrics for evaluating business performance. It strips out financing decisions (interest), tax jurisdictions (taxes), and non-cash accounting charges (depreciation and amortization) to reveal core operating profitability.
Why Use EBITDA?
EBITDA allows apples-to-apples comparison between companies regardless of their capital structure, tax situation, or accounting policies. A highly leveraged company and an all-equity company with identical operations will have different net incomes but the same EBITDA. This makes it the standard metric for M&A valuation, credit analysis, and benchmarking.
EBITDA vs Net Income
Net income is the true bottom line after all expenses. EBITDA removes non-operating and non-cash items to focus on operational performance. Neither metric is “better” — they answer different questions. Use net income for actual profitability; use EBITDA for comparing operating efficiency and estimating enterprise value.
Limitations of EBITDA
EBITDA ignores capital expenditure requirements. A company with $1M EBITDA but $900K in required annual capex has very different economics than one with $100K capex. It also excludes working capital changes and can be manipulated through aggressive revenue recognition. Always pair EBITDA analysis with cash flow statements and capex review.
Industry Multiples
EBITDA multiples vary widely by industry, growth rate, and market conditions. High-growth SaaS companies command 8–12x because of recurring revenue and scalability. Manufacturing trades at 4–6x due to capital intensity. Services firms at 3–5x because of lower barriers to entry. Multiples also shift with interest rates and M&A market activity.