EBITDA Calculator
EBITDA strips financing and accounting choices out of the numbers so the core operation can be compared with any other business. Lenders, investors and buyers lean on it because two companies with identical operations but different loans or asset ages should look identical here. This calculator shows EBITDA alongside EBIT, net profit and the EBITDA margin, making clear which costs the headline figure leaves behind.
Enter values
Results
- EBITDA
- ₹14,00,000.00
- EBIT (after depreciation)
- ₹11,00,000.00
- Net profit
- ₹8,00,000.00
- EBITDA margin
- 28%
How is the EBITDA calculated?
Start with revenue for the period, then enter operating expenses — staff, rent, materials, marketing — everything it costs to run the business before depreciation. Deducting those gives EBITDA; take off depreciation and amortisation as well to reach EBIT; then subtract interest and tax to land on net profit. The final row divides EBITDA by revenue, so you can see how many paise of every rupee the operation keeps.
Formula
EBIT = Revenue − Operating expenses − Depreciation & amortisation. EBITDA = EBIT + Depreciation & amortisation. Net profit = EBIT − Interest − Tax. EBITDA margin = EBITDA ÷ Revenue × 100. Depreciation spreads an asset's cost over its life and amortisation does the same for intangibles; neither is cash leaving the bank, so EBITDA adds them back.
Example
A distributor bills ₹50,00,000 in a year. Staff, rent, freight and marketing come to ₹36,00,000, depreciation on its vans is ₹3,00,000, interest on a vehicle loan ₹1,00,000 and tax ₹2,00,000. EBITDA = 50,00,000 − 36,00,000 = ₹14,00,000, and EBITDA margin = 14,00,000 ÷ 50,00,000 × 100 = 28%. EBIT is 14,00,000 − 3,00,000 = ₹11,00,000, and net profit = 11,00,000 − 1,00,000 − 2,00,000 = ₹8,00,000.
Things to remember
EBITDA is a comparison tool, not a bank balance: it ignores loan repayments, tax and the cash that replaces worn-out equipment. Read it beside operating cash flow, and keep the period identical to the figures you quote. When it feeds a sale or a loan, carry it into the valuation calculator.
Frequently Asked Questions
What does EBITDA actually tell me?
It shows what the core business earns before interest, tax and non-cash depreciation charges. Two companies with the same EBITDA run similar operations even if one is debt-free and the other pays heavy interest, which is why banks start their comparisons here.
Is EBITDA the same as net profit?
No. Net profit comes after interest, tax and depreciation; EBITDA stops before all three. A company can post healthy EBITDA and still lose money once loan interest and tax are deducted, so always read the two rows together rather than quoting either alone.
Why are depreciation and amortisation added back?
Both are bookkeeping entries rather than payments leaving the bank: a delivery van's cost is spread across five years even though the cash went out on day one. Adding them back leaves a figure driven purely by the trading performance of the period.
What is considered a good EBITDA margin?
It varies sharply by sector — construction often runs under 10%, trading businesses 10–20% and mature software firms above 30%. Compare against companies of your own size and stage, and treat a slipping margin as an early warning about costs.
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