EBITDA Calculator — Earnings Before Interest, Taxes, D&A
Compute EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization) from the bottom up using figures from a company's income statement and cash-flow statement. See each add-back contribution and compare EBITDA to EBIT (operating income).
Earnings Before Interest, Taxes, Depreciation & Amortization
- 1
EBIT (operating income)
500,000 + 100,000 + 150,000 = 750,000Net income with interest and taxes added back. - 2
D&A add-back
75,000 + 25,000 = 100,000 - 3
EBITDA
750,000 + 100,000 = 850,000
How does this calculator work?
EBITDA = Net Income + Interest + Taxes + Depreciation + Amortization. It strips financing costs and non-cash charges to reveal operating profitability. EBIT (Net Income + Interest + Taxes) is the halfway point, before the D&A add-back. Neither metric is a GAAP/IFRS measure — definitions may vary.
Formula
How this is calculated
EBITDA is a proxy for operating cash flow that strips out the effects of financing decisions (interest), tax environments (taxes), and non-cash accounting charges (depreciation and amortization). Starting from net income — the bottom line of the income statement — the calculator adds back these four items to arrive at EBITDA. Depreciation and amortization figures are typically found in the cash-flow statement or disclosed as a separate line in financial statement notes.
EBITDA is widely used in corporate finance for valuation (via EV/EBITDA multiples), credit analysis, and cross-company comparisons when capital structures or tax regimes differ. The intermediate figure — EBIT (Net Income + Interest + Taxes) — equals operating income and is also shown, as it is useful for calculating EBIT margin and interest coverage ratios.
Key limitation: EBITDA is not equivalent to free cash flow. It ignores working capital changes, capital expenditure requirements (sustaining capex can dwarf D&A in capital-intensive industries), and actual cash tax payments. It is also not a GAAP/IFRS measure — different analysts may treat one-off items differently. Always verify whether figures are annual (trailing twelve months) or projected.
Frequently asked questions
EBITDA removes the influence of leverage (interest), tax jurisdictions (taxes), and non-cash accounting policies (D&A), making it easier to compare the operating performance of companies with different capital structures, domiciles, or asset ages. It is especially common in LBO modelling, credit analysis, and sector peer comparisons.
D&A is usually found in the operating activities section of the cash-flow statement as an add-back to net income, because it is a non-cash charge. It may also appear as a separate line in the income statement or be disclosed in the notes. Some companies present EBITDA directly in their earnings releases.
No. EBITDA approximates operating cash flow but ignores changes in working capital, which can be substantial, and capital expenditures. Free cash flow (operating cash flow minus capex) is a better measure of actual cash generation. Warren Buffett has famously criticised EBITDA for this reason.
TG we-Calculate Editorial Team. (2026). EBITDA Calculator — Earnings Before Interest, Taxes, D&A [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/ebitda-calculator
TG we-Calculate Editorial Team. "EBITDA Calculator — Earnings Before Interest, Taxes, D&A." TG we-Calculate. 2026. https://we-calculate.com/calculator/ebitda-calculator.
TG we-Calculate Editorial Team, "EBITDA Calculator — Earnings Before Interest, Taxes, D&A," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/ebitda-calculator
@misc{wecalculate_ebitda_calculator, title = {EBITDA Calculator — Earnings Before Interest, Taxes, D&A}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/ebitda-calculator}}, year = {2026}, note = {TG we-Calculate} }
Did this calculator help you?