EBITDA Calculator: EBITDA, EBITDA Margin & EV/EBITDA Multiple
EBITDA shows a company’s operating earnings before financing, tax and accounting write-offs — the number buyers and investors use to compare businesses.
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The EBITDA Formula
EBITDA margin = EBITDA ÷ Revenue × 100
Example: Net income 800,000, interest 150,000, taxes 250,000, depreciation 200,000 and amortization 50,000 give EBITDA of 1,450,000. On revenue of 10 million that is a 14.5% EBITDA margin.
Works in any currency — enter all amounts in the same one.
EV/EBITDA: Valuing a Business
Buyers of private businesses often price them as a multiple of EBITDA. Multiples vary widely by industry, size and growth — smaller private businesses typically sell for lower multiples than large listed companies. A business with 1.45 million of EBITDA valued at 6× would be worth about 8.7 million before debt.
What EBITDA Leaves Out
- Capital spending: a business that must keep buying equipment can have strong EBITDA but weak cash flow.
- Debt: interest is excluded, so check interest coverage separately.
- Working capital: growing businesses tie up cash in stock and receivables.
Frequently Asked Questions
What is a good EBITDA margin?
It depends on the industry: software firms can exceed 30%, while retailers and restaurants often run at 5%–15%.
Is EBITDA the same as operating profit?
No. Operating profit (EBIT) is after depreciation and amortization; EBITDA adds them back.
Why do investors use EBITDA?
It removes the effects of financing, tax and accounting choices, making companies with different structures easier to compare.
Can EBITDA be negative?
Yes — it means the core operations lose money before interest, tax and write-offs.