EBITDA Calculator
If you want to determine the earnings or profit your business makes before paying interest, taxes, depreciation, and Amortization, this EBITDA calculator can help you out.
EBITDA is known as Earnings before Interest, Taxes, Depreciation, and Amortization. As EBIT, EBITDA is used to estimate the profit a business organization earns before paying any taxes and interest, but it has an addition of depreciation and Amortization.
A company’s EBITDA multiple help to find the normalized ratio for differences in the capital, on the other hand, EBITDA help to estimate the company's operating performance. You can use EBITDA multiple calculators to find the business performance.
Table of Contents
Formula of EBITDA Calculator
To find out the Earnings before Interest, Taxes, Depreciation, and Amortization, you can use our EBITDA calculator; or to determine the value manually, you can use the formula listed below.
EBITDA = operating profit + depreciation expense + amortization expense
1. Operating profit is the profits earned from core business functions before deducting any tax and interest.
So we can write the formula used for operating profit as:
Operating Profit = Interest Expenses + Taxes + Net Profit
2. Depreciation expense is the portion of assistance that decreases over time. e.g., Machinery and other equipment of a company.
3. Amortization expense is a method of clearing debt with periodic adjustments performed over some time.
Note:
To calculate the margin of safety, you can use our Margin Of Safety Calculator.
Example
For a more precise understanding, let us have an example below:
Suppose an ABC company has generated an operating profit of $50,000. In contrast, the Depreciation expense and Amortization expenses are $10,000 and $7,500 sequentially, then find out the Earnings before Interest, Taxes, Depreciation, and Amortization of ABC company.
Given data
Depreciation expense = $10,000
Amortization expenses = $7,500
Operating profit = $50,000
To Find
Earnings before Interest, Taxes, Depreciation, and Amortization = EBITDA = ?
Solution
EBITDA = operating profit + depreciation expense + amortization expense
Putting values in the above equation
EBITDA = $50,000 + $10,000 + $7,500
The Earnings before Interest, Taxes, Depreciation, and Amortization of ABC Company are $67,500.
How to use the EBITDA Calculator?
The steps to use the EBITDA calculator are as follows:
Step 1: Enter the value of operating profit in the first required input.
Step 2: Enter the value of amortization expense in the second required input.
Step 3: Enter the value of depreciation expense in the third required input.
Step 4: The calculator will automatically display an answer on the screen.
Calculator use
To instantly find the Earnings before Interest, Taxes, Depreciation, and Amortization, you can use our free and online EBITDA calculator. Just enter the required values, and it will show the answer on the screen.
