EBITDA Calculator
Operating profitability metric.
Calculate EBITDA and EBITDA margin from revenue, COGS, operating expenses, depreciation, and amortisation — the headline operating-profit metric.
What this tool does
This calculator computes EBITDA—earnings before interest, tax, depreciation, and amortisation—by taking your revenue and subtracting cost of goods sold and operating expenses, then adding back depreciation and amortisation charges. The result shows your EBITDA figure alongside the EBITDA margin, expressed as a percentage of revenue. Revenue and operating expenses are the primary drivers of the outcome. A typical use case involves comparing operational performance across periods or between businesses by isolating the earnings generated from core operations before financing structure and accounting treatments affect the picture. The calculation assumes that all inputs are accurate and complete; it does not account for one-off items, exceptional gains or losses, or changes in working capital. Results are presented for educational illustration of how the metric is derived.
Enter Values
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Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) measures operating profitability before capital structure and non-cash charges distort the picture. It's used to compare businesses with different debt levels and different depreciation schedules, and is the most common base for private-company valuations (EBITDA × multiple).
10M revenue with 4M COGS, 3M operating expenses, 500k depreciation, and 100k amortization produces 3M EBITDA. EBITDA margin is 30%, which is within the range commonly reported for service businesses and high for manufacturing. Software businesses typically target 30-40% EBITDA margin; restaurants 10-20%.
EBITDA has critics. It excludes real costs: interest must be paid, assets do wear out, tax is real. A business with 30% EBITDA and 5% net margin is a cash-losing machine dressed up as profitable. Pairing EBITDA with free cash flow exposes the difference between operational profit and real money in the bank.
Run it with sensible defaults
Using revenue of 10,000,000, cost of goods sold of 4,000,000, operating expenses of 3,000,000, depreciation of 500,000, the calculation works out to 3,600,000.00. The defaults are meant as a starting point, not a recommendation.
The levers in this calculation
The inputs — Revenue, Cost of Goods Sold, Operating Expenses, Depreciation, and Amortization — do not pull with equal force. Not every input has equal weight. Adjusting one input at a time toward extreme values shows which ones move the result most.
How the math works
Gross profit = revenue - COGS. Operating profit = gross profit - opex. EBITDA = operating profit + D + A. Margin = EBITDA ÷ revenue.
What the result tells you
The calculation distils your inputs into a single figure. Its value is in seeing how that figure shifts as the inputs change.
What this doesn't capture
The result reflects only the inputs you provide and the assumptions built into the formula. It is a simplified model rather than a complete picture, and factors specific to your situation may matter just as much.
£10,000,000 revenue - £4,000,000 COGS - £3,000,000 opex + £500,000 D + £100,000 A = $3,600,000.00.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
This calculator computes EBITDA by taking revenue and subtracting cost of goods sold and operating expenses, then adding back depreciation and amortization charges. The formula is: EBITDA equals revenue minus cost of goods sold minus operating expenses, plus depreciation, plus amortization. EBITDA margin is then calculated by dividing the resulting EBITDA figure by total revenue, expressed as a percentage. The model treats depreciation and amortization as non-cash charges that reduce accounting profit but do not represent actual cash outflows, making EBITDA useful for comparing operating profitability across businesses. The calculation does not account for interest expense, tax liability, capital expenditure, working capital changes, or differences in asset valuation methods between entities.
References
Frequently Asked Questions
Why add back depreciation?
When does EBITDA mislead?
How does EBITDA relate to valuation?
What's a good EBITDA margin?
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