EBITDA Calculator

Enter your operating profit, depreciation, amortization, interest, taxes, and revenue to calculate EBITDA, margin, EBIT, and key coverage ratios with actionable insights.

Created by Luis GonzalezLast updated: June 22, 2026

How to Use This Calculator

1
Enter Operating Profit
Input your company's operating profit (EBIT) — revenue minus cost of goods sold and operating expenses including depreciation and amortization.
2
Input Depreciation Expense
Enter the annual depreciation expense for tangible assets such as equipment, vehicles, and buildings.
3
Input Amortization Expense
Enter the annual amortization expense for intangible assets such as patents, trademarks, or goodwill.
4
Enter Interest Expense
Input the total interest paid on debt obligations during the period — used to calculate interest coverage ratio.
5
Enter Tax Expense
Input the total income taxes paid or accrued during the period — used to estimate net income.
6
Input Total Revenue
Enter the total revenue for the period — used to calculate EBITDA margin percentage.
7
Review Results and Insights
View your EBITDA, EBITDA Margin, EBIT, D&A Total, and Interest Coverage ratio. The insights panel shows D&A as a share of EBITDA, debt service capacity, and EBITDA-to-EBIT ratio with a breakdown bar showing EBITDA composition.

Example Calculation

A mid-sized logistics company wants to calculate its EBITDA to assess operational cash flow and debt-servicing capacity.

Operating Profit

$10,000

Depreciation Expense

$2,000

Amortization Expense

$3,000

Interest Expense

$1,000

Tax Expense

$1,500

Total Revenue

$50,000

Results

EBITDA

$15,000

EBITDA Margin

30.00%

EBIT

$10,000

D&A Total

$5,000

Interest Coverage

15.00x

Insights card shows D&A represents 33.

Tips

Use EBITDA as a Cash Flow Proxy

EBITDA strips out non-cash charges (D&A) and financing decisions, making it a useful proxy for operating cash flow. Compare your EBITDA margin to industry peers — above 20% is generally strong, 10-20% is moderate, and below 10% may signal thin margins.

Watch the D&A Ratio

Check the D&A as Share of EBITDA in the insights panel. A ratio above 30% (like the 33.3% in the example) indicates a capital-intensive business that needs significant reinvestment just to maintain operations — EBITDA alone may overstate true free cash flow.

Benchmark Interest Coverage

The Interest Coverage Ratio (EBITDA / Interest Expense) tells lenders how easily you can service debt. Below 1.5x signals risk; 3x or above provides a comfortable cushion. In the example, 15.00x coverage means the company earns 15 times its interest obligation.

Compare EBITDA to EBIT for Full Picture

EBIT (Operating Profit) reflects earnings after accounting for asset wear-and-tear. A large gap between EBITDA and EBIT (like $15,000 vs $10,000 in the example, or 1.50x ratio) means heavy D&A — good to know before valuation negotiations.

Understanding Your Business Through EBITDA

The EBITDA Calculator computes Earnings Before Interest, Taxes, Depreciation, and Amortization to reveal a company's core operational profitability. By stripping out non-cash charges and financing decisions, EBITDA provides a cleaner lens for comparing business performance across industries and capital structures. For a business with $10,000 in operating profit and $5,000 in D&A, the EBITDA is $15,000 with a 30.00% margin on $50,000 revenue.

The Financial Logic Behind EBITDA Calculation

The calculator builds EBITDA by adding non-cash depreciation and amortization back to operating profit, then derives key ratios for financial analysis.

The primary formulas are:

EBITDA = Operating Profit + Depreciation + Amortization
EBIT = Operating Profit (by definition)
EBITDA Margin = (EBITDA / Total Revenue) x 100
Interest Coverage Ratio = EBITDA / Interest Expense
D&A Ratio = (D&A Total / EBITDA) x 100
EBITDA-to-EBIT Ratio = EBITDA / EBIT
Net Income (estimated) = Operating Profit - Interest - Taxes

Here, Operating Profit is EBIT — the profit after subtracting cost of goods sold and operating expenses (including D&A) from revenue. Depreciation and Amortization are non-cash charges added back to arrive at EBITDA. Total Revenue is the top-line sales figure, and Interest Expense is the cost of debt financing.

💡 For a comprehensive view of your company's financial health, analyze other key metrics alongside EBITDA. Our Net Operating Income (NOI) Calculator provides insights into property-level profitability.

Analyzing a Logistics Company's EBITDA: A Worked Example

Consider a logistics company with the following financial figures:

Operating Profit: $10,000
Depreciation Expense: $2,000
Amortization Expense: $3,000
Interest Expense: $1,000
Tax Expense: $1,500
Total Revenue: $50,000

Calculate EBITDA: EBITDA = $10,000 + $2,000 + $3,000 = $15,000
Calculate EBIT: EBIT = Operating Profit = $10,000
Calculate EBITDA Margin: EBITDA Margin = ($15,000 / $50,000) x 100 = 30.00%
Calculate D&A Total and Ratio: D&A Total = $2,000 + $3,000 = $5,000 D&A Ratio = ($5,000 / $15,000) x 100 = 33.3%
Calculate Interest Coverage Ratio: Interest Coverage = $15,000 / $1,000 = 15.00x
Calculate EBITDA-to-EBIT Ratio: EBITDA / EBIT = $15,000 / $10,000 = 1.50x

The company has an EBITDA of $15,000 with a strong 30.00% margin. D&A represents 33.3% of EBITDA, indicating a capital-intensive operation. Interest coverage at 15.00x is excellent, showing ample capacity to service debt. The EBITDA-to-EBIT ratio of 1.50x reflects the $5,000 non-cash D&A buffer between the two metrics.

💡 Beyond operational earnings, understanding your bottom line after all expenses is essential. Use our Net Profit Calculator to determine your business's net income.

Investor and Analyst Perspectives on EBITDA in 2026

Financial professionals rely on EBITDA for several key purposes in today's market. For valuation, EBITDA multiples (Enterprise Value / EBITDA) remain a primary benchmark in M&A transactions, offering a quick way to compare companies regardless of capital structure. In debt financing, lenders set covenants based on debt-to-EBITDA ratios and use the interest coverage ratio to assess repayment capacity. For operational efficiency, analysts use EBITDA margin trends to evaluate management performance, as it isolates core business results from non-operating variables like tax jurisdiction or depreciation method choices.

When EBITDA Falls Short

While EBITDA is valuable, it has well-known limitations. It ignores capital expenditure requirements — a company with high D&A (above 30% of EBITDA) likely needs substantial capex just to maintain its asset base. It also excludes working capital changes and actual cash tax payments. Analysts in 2026 increasingly pair EBITDA with free cash flow (FCF) analysis, using the formula FCF = EBITDA - Capex - Changes in Working Capital - Cash Taxes to get a more complete picture of cash generation. The D&A ratio shown in the insights panel helps flag when EBITDA may significantly overstate true cash flow.

Frequently Asked Questions

What does EBITDA stand for and why is it used?

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a non-GAAP metric used to assess operational performance by removing financing costs, tax effects, and non-cash charges. Investors and analysts use it to compare core business profitability across companies with different capital structures, asset bases, or tax jurisdictions.

How is EBITDA different from EBIT?

EBIT (Earnings Before Interest and Taxes) equals operating profit and includes the impact of depreciation and amortization. EBITDA adds those non-cash D&A charges back to EBIT, giving a higher figure. For example, with $10,000 EBIT and $5,000 in D&A, EBITDA is $15,000. The EBITDA-to-EBIT ratio (1.50x in this case) shows how much non-cash expense separates the two metrics.

What is a good EBITDA margin?

EBITDA margins vary by industry. Software and tech companies often achieve 20-40%+, while retail and manufacturing may operate at 5-15%. Generally, above 20% is considered strong, 10-20% is moderate, and below 10% is thin. Always benchmark against industry peers rather than using a universal standard.

What is a safe interest coverage ratio?

An interest coverage ratio (EBITDA / Interest Expense) of 3x or above is generally considered comfortable — it means the company earns three times its interest obligation. Between 1.5x and 3x is acceptable but warrants monitoring. Below 1.5x signals potential difficulty servicing debt and may trigger covenant violations.

Why is EBITDA not a perfect measure of cash flow?

EBITDA excludes capital expenditures (capex) needed to replace depreciating assets, changes in working capital, and actual tax payments. A company with high D&A relative to EBITDA (above 30%) likely needs substantial capex reinvestment, meaning real free cash flow is significantly lower than EBITDA suggests. Always pair EBITDA with free cash flow analysis for a complete picture.