FinanceCorporate Finance
Enterprise Value Calculator
Calculate enterprise value from market capitalization, debt, preferred shares, minority interest, and cash with this free calculator. Find the true acquisition cost of any company.
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The EBITDA Calculator helps you compute a company's earnings before interest, taxes, depreciation, and amortization. EBITDA is one of the most widely used profitability metrics in corporate finance, offering a clearer view of operational performance by removing the effects of capital structure, tax jurisdictions, and non-cash accounting entries. Whether you are evaluating a potential acquisition, benchmarking companies across industries, or analyzing your own business, this calculator provides a fast and reliable way to determine EBITDA from its core components.
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It measures the profit a company generates from its day-to-day operations without factoring in how the business is financed, what tax rates apply, or how it accounts for the wear and tear on its assets.
The formula starts with operating profit (also called EBIT, or earnings before interest and taxes) and adds back two non-cash expenses:
EBITDA = Operating Profit + Depreciation Expense + Amortization Expense
Depreciation represents the gradual loss of value in tangible assets such as machinery, vehicles, and buildings. Amortization serves a similar purpose for intangible assets like patents, trademarks, and goodwill. Both are accounting entries that reduce reported income but do not involve actual cash leaving the business. By adding them back to operating profit, EBITDA provides a proxy for cash-based operating earnings.
For example, if a company reports an operating profit of $500,000, depreciation expense of $80,000, and amortization expense of $20,000, its EBITDA is $600,000. This figure tells analysts and investors how much cash the business generates from operations before any debt payments, tax obligations, or asset write-downs.
There are two common approaches to calculating EBITDA. The method used in this calculator starts from operating profit:
Find the operating profit (EBIT) on the income statement. This is revenue minus cost of goods sold minus operating expenses.
Locate the depreciation expense, which is often listed on the income statement or in the notes to the financial statements.
Locate the amortization expense, which may be combined with depreciation in a single line item labeled "D&A" or reported separately.
Add all three values together: EBITDA = Operating Profit + Depreciation + Amortization.
An alternative method starts from net income and adds back interest, taxes, depreciation, and amortization. Both methods should produce the same result when the underlying data is consistent.
Enter the company's operating profit in the "Operating Profit" field. This is the EBIT figure from the income statement.
Enter the amortization expense in the "Amortization Expense" field.
Enter the depreciation expense in the "Depreciation Expense" field.
The calculator automatically computes EBITDA. You can also enter any three known values and the calculator solves for the fourth.
Cross-company comparison: Because EBITDA strips out interest, taxes, and non-cash charges, it allows direct comparison of operating performance between companies with different capital structures, tax situations, or depreciation schedules.
Valuation multiples: The EV/EBITDA ratio (enterprise value divided by EBITDA) is one of the most common valuation multiples used in mergers and acquisitions, private equity, and equity research. A lower multiple may indicate an undervalued company.
Debt capacity analysis: Lenders often use EBITDA to evaluate a borrower's ability to service debt. The debt-to-EBITDA ratio indicates how many years of earnings it would take to pay off all outstanding debt.
Operating trend analysis: Tracking EBITDA over several quarters or years reveals whether a company's core operations are improving, stable, or declining, independent of changes in accounting policies or financing.
Net income is the bottom line of the income statement after all expenses, including interest, taxes, depreciation, and amortization. EBITDA sits higher on the income statement and excludes those items. Each metric serves a different purpose.
Net income reflects the actual profit available to shareholders after all obligations. It is the appropriate figure for calculating earnings per share and return on equity. However, it can be distorted by one-time tax events, interest rate changes, or aggressive depreciation schedules, making year-over-year or peer comparisons less straightforward.
EBITDA focuses purely on operational cash generation. Use it when you want to compare operating efficiency across companies or industries, evaluate a business for acquisition, or assess debt coverage. Use net income when you need to understand actual shareholder returns or regulatory profitability.
EBITDA is not a GAAP or IFRS measure. Companies may calculate it differently, so always verify what is included when comparing figures across firms.
A high EBITDA does not guarantee strong cash flow. Capital expenditures, working capital changes, and debt payments still need to be covered. Always look at free cash flow alongside EBITDA.
Be cautious with capital-intensive industries. Companies with large depreciation charges may report impressive EBITDA while still requiring significant reinvestment to maintain operations.
Yes. A negative EBITDA means the company's core operations are not generating enough revenue to cover operating costs, even before accounting for interest, taxes, and non-cash charges. This is a strong warning sign that the business model may not be sustainable without external funding.
EBIT (Earnings Before Interest and Taxes) is the same as operating profit. It accounts for depreciation and amortization but excludes interest and taxes. EBITDA goes one step further by also excluding depreciation and amortization. EBIT = EBITDA minus depreciation minus amortization.
EBITDA removes variables that differ from company to company but have nothing to do with operating performance. Two companies with identical operations could report very different net incomes due to different debt levels, tax jurisdictions, or asset depreciation methods. EBITDA normalizes these differences, making it easier to compare the underlying business.
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