EBITDA Calculator
This EBITDA calculator finds operating earnings before interest, taxes, depreciation and amortization. Example: net income of 80,000, interest of 20,000, taxes of 30,000 and D&A of 50,000 give an EBITDA of 180,000.
Example: Calculation: Bottom-up: from net income · Revenue 1,000,000 · Net income 80,000 · Net interest expense 20,000 · Income taxes 30,000 · Depreciation and amortization (D&A) 50,000 → Result: EBITDA = 180,000 · EBIT = 130,000. Source: Wikipedia – EBITDA (definition, calculation from the bottom up and from the top down). Updated: .
How it is calculated
EBITDA stands for earnings before interest, taxes, depreciation and amortization. It aims to show operating earning power independent of financing, tax burden and depreciation methods. EBIT is earnings before interest and taxes; EBITDA adds depreciation and amortization back on top.
Two routes to the same result
Bottom-up you start at net income: EBIT = net income + interest + taxes, EBITDA = EBIT + D&A. Top-down you start at revenue: EBITDA = revenue − operating costs excluding D&A, EBIT = EBITDA − D&A. The margin puts the figure in relation to revenue.
Worked example
Net income 80,000, interest 20,000, taxes 30,000, D&A 50,000, revenue 1,000,000. EBIT = 80,000 + 20,000 + 30,000 = 130,000, which is 13% of revenue. EBITDA = 130,000 + 50,000 = 180,000, an EBITDA margin of 18%. Top-down with operating costs of 820,000 gives the same: 1,000,000 − 820,000 = 180,000.
- Companies often adjust further for one-off items and the financial result; they are not treated separately here.
- EBITDA is not cash flow, because investment, taxes and interest still cost money.
- Enter interest net, that is interest expense minus interest income.
Frequently asked questions
How do you calculate EBITDA?
Bottom-up: net income plus interest plus taxes plus D&A. Top-down: revenue minus operating costs excluding D&A. In the example both routes give 180,000.
What is the difference between EBIT and EBITDA?
EBIT is earnings before interest and taxes, after D&A. EBITDA adds D&A back and is therefore equal or higher.
What does the EBITDA margin tell you?
It shows what percentage of revenue remains as operating earnings before D&A. In the example 180,000 of 1,000,000, so 18%.
Sources and legal basis
- Wikipedia – EBITDA (definition, calculation from the bottom up and from the top down)
- Wikipedia – EBITDA (deutsch)
As of: · Editorial policy
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