EBITDA Calculator
Calculate Earnings Before Interest, Taxes, Depreciation & Amortization — the key metric for comparing business operating performance.
EBITDA Formula
EBITDA Margin (%) = (EBITDA ÷ Revenue) × 100
EBITDA strips out financing decisions (interest), accounting choices (D&A), and tax environments to show the raw operating profitability of a business. It's widely used in M&A valuation, lending covenants, and performance benchmarking.
Why Remove D&A?
Depreciation and amortization are non-cash charges — they reduce accounting profit but don't require cash outflow. Removing them makes EBITDA closer to operating cash flow, which is more useful for comparing businesses with different capital structures or asset bases.
EBITDA Multiples
Companies are commonly valued at 5–15x EBITDA in private markets, depending on industry and growth. SaaS businesses can trade at 20x+ EBITDA. This makes EBITDA central to any acquisition discussion.
Common Questions
Is EBITDA the same as cash flow?
Not exactly. EBITDA is close to operating cash flow but ignores changes in working capital and capital expenditures (capex). A better cash flow proxy is Free Cash Flow (FCF) = EBITDA − Capex − Working Capital changes − Cash Taxes.
What is a good EBITDA margin?
15%+ is generally considered healthy. Software companies often reach 30–50%+. Retail and distribution are typically 5–10%. Heavy industry varies widely depending on asset intensity.