EBITDA calculator
EBITDA is earnings before interest, taxes, depreciation and amortization: net income + interest + taxes + depreciation + amortization. Adjusted EBITDA adds normalization items such as one-time costs, which buyers will test in diligence.
Your inputs
Enter net income, interest expense, income taxes, depreciation, amortization to see the result.
Inputs
- Net income
- Bottom-line profit after all expenses.
- Interest, taxes, depreciation, amortization
- Each added back to net income.
- Add-backs
- Your normalization adjustments.
- Revenue
- Optional, for margins.
Outputs
- Reported EBITDA
- Before add-backs.
- Adjusted EBITDA
- After add-backs.
- EBITDA margins
- EBITDA ÷ revenue.
How it is calculated
EBITDA = net income + interest + taxes + depreciation + amortization
Adjusted EBITDA = EBITDA + add-backs
Worked example (illustrative)
Illustrative only: net income $500, interest $100, taxes $150, depreciation $200 and amortization $50 give EBITDA of $1,000. With $75 of add-backs, adjusted EBITDA is $1,075.
Assumptions and limitations
- EBITDA is not a GAAP measure and excludes capital spending and working capital needs.
- Add-backs are your judgment; a buyer's quality of earnings review may reject them.
- Use figures from the same period.
Questions and answers
What is adjusted EBITDA?
EBITDA after normalizing items such as one-time legal fees or above-market owner pay.
Why do buyers use EBITDA?
It approximates operating cash earnings before financing and tax choices, so companies compare more easily.
What add-backs are common?
Non-recurring expenses, owner perks and discontinued operations, each with support.
Is EBITDA the same as cash flow?
No. It ignores capital expenditure, working capital and taxes paid.
Sources
Content reviewed October 9, 2026 by the SourceX Partnerships Team. Results are calculated in your browser; nothing you type is stored.