Overview
Enter net income along with interest, taxes, depreciation, and amortization to calculate EBITDA: Net Income + Interest + Taxes + Depreciation + Amortization. Each of these four items is added back to net income because EBITDA is designed to strip out financing decisions (interest), tax jurisdiction and rate differences (taxes), and non-cash accounting charges (depreciation and amortization), leaving a figure meant to approximate cash operating performance before those factors. EBITDA can come out negative for a company whose core operations are genuinely unprofitable even before those add-backs - this calculator allows that rather than treating it as invalid input, since a negative EBITDA is a real (if concerning) result, not a calculation error. Widely used for comparing companies with different capital structures, tax situations, or depreciation schedules, and as the denominator in valuation multiples like EV/EBITDA. Runs entirely client-side, and this is an informational estimate, not financial advice.
Best for: Comparing operating cash profitability across companies with different debt, tax, or depreciation profiles
How to use this tool
- Enter net income. The company's net income for the period.
- Enter interest, taxes, depreciation, and amortization. The four items EBITDA adds back to net income.
- Read the EBITDA. Net Income + Interest + Taxes + Depreciation + Amortization.
Frequently asked questions
Yes - if a company's net income is deeply negative even after adding back interest, taxes, depreciation, and amortization, EBITDA itself comes out negative. This calculator allows that as a valid result rather than rejecting it, since it reflects genuinely unprofitable core operations, not an input error.
EBITDA = EBIT + Depreciation + Amortization is mathematically equivalent to Net Income + Interest + Taxes + Depreciation + Amortization, since EBIT itself equals Net Income + Interest + Taxes. This calculator starts from net income because that's typically the figure most readily available from a company's income statement.
Because it excludes real cash costs - interest actually has to be paid on debt, taxes actually have to be paid to the government, and depreciation reflects real capital assets wearing out that will eventually need replacing. EBITDA is useful for comparing operating performance across companies with different structures, but it isn't a substitute for net income or free cash flow when assessing actual cash profitability.