How EBITDA Is Computed

This EBITDA calculator starts from net income and adds back interest expense, tax expense, depreciation, and amortization. The result isolates core operating profitability before financing decisions and accounting charges. EBITDA margin — EBITDA divided by revenue — lets you compare profitability across companies and industries.

EBITDA vs Operating Income

Operating income (EBIT) sits below EBITDA: it is EBITDA minus depreciation and amortization, and it reflects the profit a business earns from its actual operations after consuming its fixed and intangible assets.

When to Use It

Lenders and acquirers commonly use EBITDA multiples to value businesses and assess debt capacity. Because it strips out non-cash charges, it is most meaningful for capital-intensive companies when combined with free cash flow and capex figures.