EBITDA calculator

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a financial metric that measures a company’s operating performance by excluding certain non-operating expenses. It provides an indication of a company’s profitability before accounting for interest, taxes, and non-cash expenses.

Ciaran Burke

Page written by AI. Reviewed by Ciaran Burke on March 15, 2024.

How to calculate EBITDA

To calculate EBITDA, follow these steps:

  1. Determine the company’s net income: Obtain the net income figure from the company’s income statement. Net income is the total revenue minus all operating expenses, interest, and taxes.

  2. Add back interest, taxes, depreciation, and amortization: Identify the interest expense, taxes, depreciation, and amortization from the company’s financial statements. Add these values back to the net income obtained in step 1.

  3. Calculate EBITDA: Sum up the net income, interest, taxes, depreciation, and amortization figures to calculate the EBITDA.

The formula for calculating EBITDA is:

EBITDA = Net Income + Interest + Taxes + Depreciation + Amortization

EBITDA is commonly used as a measure of a company’s cash flow and profitability, as it provides insight into its operating performance without considering non-operating factors. However, it’s important to note that EBITDA has limitations and should be used alongside other financial metrics and analysis when evaluating a company’s financial health.

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This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.

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