EBITDA Calculator
Add back interest, tax, depreciation and amortisation to get EBITDA — calculated from both directions at once, so this EBITDA calculator catches the misfiled cost that makes the two disagree.
Free · No signup · Runs entirely in your browser
Start from net income and add back the four things EBITDA ignores. Revenue and operating expenses are optional — fill them in and the second route cross-checks the first.
Bottom line, after everything.
Interest expense for the period.
Income tax for the period.
On physical assets.
On intangibles.
Optional — needed for EBITDA margin.
Optional — excluding D&A. Cross-checks the result.
Both routes agree at $200,000. Revenue less operating expenses lands on the same number as net income plus the add-backs, which means every cost is sitting in the bucket you think it is.
EBITDA is what a buyer values. If you are building the product largely on your own, Tekk turns what you want into specs your coding agent can actually execute.
The formula
EBITDA is net income with four things added back:
EBITDA = net income + interest + taxes + depreciation + amortisation
The point of adding them back is comparability. Interest depends on how the business is financed, tax on where it's registered, and depreciation on accounting choices about assets bought years ago. Strip all four out and you're closer to what the operating business actually produces.
Worked example
| Line | Amount |
|---|---|
| Net income | $100,000 |
| + Interest | $20,000 |
| + Taxes | $30,000 |
| + Depreciation | $40,000 |
| + Amortisation | $10,000 |
| EBITDA | $200,000 |
At $500,000 of revenue that's a 40% EBITDA margin. Removing D&A again gives EBIT of $150,000.
The second route, and why it matters
There's another way to the same number:
EBITDA = revenue − operating expenses excluding D&A
$500,000 of revenue less $300,000 of operating expenses is $200,000 — the same answer. When the two routes disagree, the numbers are wrong somewhere, and it's almost always one of two things: depreciation left sitting inside operating expenses, or interest and tax counted twice. This EBITDA calculator runs both and shows the gap, which is the check most calculators skip.
Why buyers ask for it
Small businesses are usually valued on a multiple of EBITDA:
enterprise value ≈ EBITDA × multiple
Multiples vary widely by sector, size and growth — low single digits for small service businesses, considerably higher for software with durable recurring revenue. On $200,000 of EBITDA, the difference between a 4× and an 8× multiple is $800,000. That's why the add-backs get argued over so carefully in a sale.
The honest criticism
EBITDA ignores real costs. Depreciation exists because assets wear out and eventually need replacing; a business that adds back heavy depreciation year after year is quietly deferring capital spending it will still have to fund. Interest is a genuine obligation for a leveraged company. A business can report healthy EBITDA and still run out of cash, which is why lenders look at debt to EBITDA rather than EBITDA alone.
How it works
- 1
Start from net income
Enter the bottom line, then add back interest, tax, depreciation and amortisation. The EBITDA calculator updates as you type — no button, nothing sent anywhere.
- 2
Add revenue for the margin
EBITDA on its own is an absolute number. Divide it by revenue and you get EBITDA margin, which is what makes it comparable to another business of a different size.
- 3
Cross-check with the second route
Add operating expenses excluding D&A and the tool computes EBITDA the other way too. If the two disagree, a cost is in the wrong bucket — and it tells you which mistake is most likely.
Frequently asked questions
- What is EBITDA?
- Earnings before interest, taxes, depreciation and amortisation. It's an attempt to measure what the operating business produces before financing decisions, tax jurisdiction and historical asset purchases distort the picture — which is what the EBITDA calculator above works out from your net income. It is not a formal accounting measure and does not appear on audited statements.
- How do you calculate EBITDA?
- Take net income and add back interest, taxes, depreciation and amortisation. Alternatively, start from revenue and subtract operating expenses excluding depreciation and amortisation. Both routes should land on the same number, and this EBITDA calculator runs them side by side so you can see immediately when they don't.
- What is a good EBITDA margin?
- It depends heavily on sector. Software businesses with established recurring revenue can run 20–40%; service businesses often sit in the 10–20% range; low-margin distribution can be healthy in single digits. As with any margin, it only means something next to comparable businesses.
- Is there an EBITDA margin calculator here?
- Yes — this is one. Enter revenue alongside the add-backs and the EBITDA margin appears next to the absolute figure. The EBITDA margin calculator result is simply EBITDA divided by revenue, expressed as a percentage.
- What is the difference between EBITDA and EBIT?
- EBIT stops before depreciation and amortisation are added back, so it still carries the cost of assets wearing out. EBITDA adds them back too. EBIT is generally the more conservative measure, and for asset-heavy businesses the gap between the two is large.
- What is the difference between EBITDA and net profit?
- Net profit is what remains after everything, including interest, tax and D&A. EBITDA deliberately removes those four. A business can show strong EBITDA and a net loss at the same time — which is precisely the situation EBITDA is often used to make look better than it is.
- How do I use an EBITDA business valuation calculator?
- Multiply EBITDA by a multiple appropriate to your sector and size. As an EBITDA business valuation calculator this gives an enterprise value, not a price to the owner — you would still deduct debt and add cash to reach equity value. Treat any single multiple as a starting point for negotiation rather than an answer.
- Can EBITDA be negative?
- Yes, and it's common in early-stage companies. Negative EBITDA means the business is losing money before any of the add-backs, so a multiple-based valuation doesn't apply. Buyers fall back to revenue multiples or asset value in that case.
- Why do people criticise EBITDA?
- Because it ignores costs that are real. Depreciation reflects assets that will need replacing, and interest is a genuine obligation. Charlie Munger's objection was that it lets people describe earnings as though capital expenditure were optional. Treat the result as a comparison tool, not a proxy for cash generation.
- What is adjusted EBITDA?
- EBITDA with further add-backs for costs the seller argues are one-off or non-recurring — a legal settlement, a founder's above-market salary, a failed product line. Every add-back raises the valuation, which is why buyers scrutinise them closely and why the adjusted figure is usually where a deal gets argued.
- Do you store the numbers I enter?
- No. The calculation runs entirely in your browser. Nothing is sent to a server, nothing is logged, and there is no account. Disconnect from the internet and it will still work.
- Why is this free, and what is Tekk?
- Tekk is a spec-driven development platform for people building software with AI coding agents. This calculator costs us nothing to run, and the founders preparing a raise are often the same people building the product. No signup, no run limit, no upsell inside the tool.
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