EBITDA Calculator is a financial tool used to measure the company’s financial strength and revenue it can generate. With our EBITDA finder, you can measure a company's earning potential before interest, taxes, depreciation, and amortization.
What Is EBITDA?
In Finance and Accounting, EBITDA is described as:
"The earnings before interest, taxes, depreciation, and amortization”
EBITDA is similar to the EBIT. It is an indicator that makes it possible to rate the actual capability of the companies.
EBITDA Calculation Formula:
Our EBITDA calculator utilizes the following formula for EBITDA calculations:
Formula # 1
EBITDA = Revenue - Expense + Ammortization + Depreciation
EBITDA = EBIT + Ammortization + Depreciation
Formula # 2
EBITDA = Net profit + taxes + interest + Ammortization + Depreciation
Read: how to figure EBITDA. For detailed learning about EBITDA, read this one.
What Is EBITDA Multiple?
EBITDA is a broadly used indicator in accounting and finance to measure how proficiently a business runs. When you look for information regarding the process of EBITDA, you might encounter EBITDA multiple.
To calculate this multiple, we need the value of earnings before interest, taxes, depreciation and amortization, and a company's enterprise value. You can use EBITDA multiple calculator for accurate calculations.
With this help, Investors can determine whether a company is undervalued or overvalued before deciding whether or not to invest.
You can also find simple interest loans to make your daily calculation easy.
How To Calculate EBITDA?
EBITDA includes all income and expenses while excluding income tax and interest expenses. Let’s explore it with the help of an example!
Example:
An enterprise has a net profit of $5,500, the expense on interest is $3,500, taxes of $4,500, depreciation expense of $2,000, and amortization expense of $2,500. How to find EBITDA?
Solution:
We can calculate EBITDA by using net income. For calculating EBITDA, we have:
EBITDA = Net profit + Interest + Taxes + Depreciation + Amortization
EBITDA = $5,500 + $3,500 + $4,500 + $2,000 + $2,500
= $18,000
With our EBITDA business valuation calculator, you only need to put the required values in the boxes; revenue, expense, amortization, and depreciation. After you enter these values, our calculator will provide the required value for you with precision and speed.
Related: EBITDA deals with depreciation also. You can find out the depreciation by using our depreciation rate calculator.
Working of EBITDA Calculator:
EBITDA finder will help you to carry out calculations with definite ease! To use the tool, follow the instructions below:
Input:
- Enter the revenue, expense, amortization, and depreciation values in their respective positions
- Tap Calculate
Output:
The online and accurate EBITDA finder will give you the following results.
- EBITDA value
- EBITDA margin
FAQs:
How Does EBITDA Compare to Gross Profit?
EBITDA measures the profitability of a company or business and compares one with another in the same zone. Gross profit is a company's profit after subtracting the cost of selling or manufacturing products.
Where Is The EBITDA Valid For?
EBITDA is extremely useful for the following.
- Business evaluation
- Determining profitability
- Comparison of the company to the other in the same sector
What Is The EBITDA Margins Formula?
EBITDA margin is the measurement that ascertains what a percentage is of your total revenue. Higher margins designate that you have a much revenue remaining after operating expenses.
You can use the EBITDA calculator online to calculate the EBITDA margin that uses the following formula:
EBIT Margin: EBITDA / Total Revenue
References:
From the source Wikipedia: Earning before interest, taxes, depreciation, amortization, Usage and criticism, Margin, Variations.