EBITDA Calculator

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Both routes reach the same EBITDA. Use whichever line items you have on hand.
Bottom-line profit after all expenses, interest and taxes.
Interest paid on debt during the period.
Corporate income tax expense for the period.
Non-cash expense allocating the cost of tangible assets.
Non-cash expense allocating the cost of intangible assets.
Net sales for the period. Used to compute the EBITDA and EBIT margins.
Currency
EBITDAStrong margin
$450,000
EBITDA margin30%
EBIT (operating income)$360,000
EBIT margin24%
Depreciation + amortization$90,000
Interest coverage (EBITDA / interest)11.25×
EBITDA$450,000
EBIT$360,000
D&A added back$90,000

EBITDA is 450,000.

  • Adding back interest and taxes to net income, then 90,000 of depreciation and amortization, gives EBITDA of 450,000.
  • EBITDA ignores financing and accounting choices, so it lets you compare the operating performance of companies with different debt loads and asset bases.
  • An EBITDA margin of 30% means every unit of revenue produces that much core operating profit before interest, tax and non-cash charges.
  • EBITDA covers interest about 11.25 times; lenders often want this comfortably above 3 times.

Next stepSubtract capital expenditure and changes in working capital to move from EBITDA toward real free cash flow.

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