TopicDrill

EBITDA Calculator

Find your EBITDA by adding interest, taxes, depreciation and amortization back to net income, then see the EBITDA margin. Enter your numbers and press Calculate.

Written by TopicDrill Editorial Team·Updated June 2026

Share this calculator

Income statement figures

Enter values from your income statement, then press Calculate.

$
$
$
$
$
$

EBITDA

$900,000

Net income$500,000
Interest$80,000
Taxes$120,000
Depreciation$150,000
Amortization$50,000

Total add-backs $400,000 · EBITDA margin 30.0%.

How EBITDA is built up

Net income 56%Interest 9%Taxes 13%Depreciation 17%Amortization 6%

Net income plus interest, taxes, depreciation and amortization equals EBITDA of $900,000.

Advertisement

How the EBITDA calculator works

EBITDA is built using the add-back method. You start from net income, the bottom line after every expense, then add back the four items that EBITDA deliberately ignores: interest, taxes, depreciation and amortization. The result reflects how the core business performed before financing and accounting choices muddy the picture.

Interest and taxes are added back because they depend on how a company is funded and where it operates, not on how well it runs day to day. Depreciation and amortization are added back because they are non-cash charges that spread the cost of past purchases over many years.

A quick example

Suppose a company reports $500,000 in net income, $80,000 of interest, $120,000 of taxes, $150,000 of depreciation and $50,000 of amortization. Adding those back gives EBITDA of $900,000. On $3,000,000 of revenue, that is a 30% EBITDA margin.

Things to keep in mind

EBITDA is useful for comparing operating performance, but it is not cash flow. It leaves out the real cost of borrowing and the capital needed to keep equipment running. For definitions of common financial terms, the U.S. Securities and Exchange Commission is a reliable source. Compare scenarios with our other free calculators.

Frequently asked questions

What is EBITDA?

EBITDA stands for Earnings Before Interest, Taxes, Depreciation and Amortization. It measures a company's operating performance by stripping out financing decisions, tax environments and non-cash accounting charges, so businesses of different structures can be compared more fairly.

How do you calculate EBITDA?

The add-back method starts from net income and adds back interest, taxes, depreciation and amortization. So EBITDA = Net income + Interest + Taxes + Depreciation + Amortization. You can also build it down from revenue by starting with operating profit and adding depreciation and amortization.

What is a good EBITDA margin?

EBITDA margin is EBITDA divided by revenue. What counts as good varies widely by industry, but a higher margin generally signals stronger operating efficiency. Compare a company only against peers in the same sector, since capital intensive industries naturally run different margins.

What are the limitations of EBITDA?

EBITDA ignores real costs like interest, taxes and the capital spending needed to replace equipment, so it can overstate how much cash a business actually generates. Use it alongside metrics like free cash flow and net income, not on its own.

Related guides

View all →

Advertisement