EBITDA Calculator Tool — Free Online | Bright Side Kit

Is a $200,000 EBITDA good or bad?

On the defaults — $120,000 of net income, $15,000 of interest, $25,000 of taxes, $30,000 of depreciation and $10,000 of amortization — the EBITDA is $200,000.00. EBITDA is earnings before interest, taxes, depreciation and amortization — the operating profit before the financing and accounting choices. As a rough yardstick, an EBITDA of $200,000.00 on $120,000.00 of net income means the add-backs are $80,000.00 — the business earned $120,000 after every cost, and $80,000 of that cost was interest, taxes, depreciation and amortization. A $200,000.00 EBITDA is neither good nor bad on its own: it is the operating profit before interest, taxes, depreciation and amortization, and the industry decides what that profit means — a $200,000.00 EBITDA in a grocery chain and a $200,000.00 EBITDA in a software company are different stories.

Three things about the model are worth stating plainly.

First, the EBITDA is $120,000 + $15,000 + $25,000 + $30,000 + $10,000 = $200,000.00. Second, the net income needed for a $250,000.00 EBITDA is $250,000.00 − $80,000.00 = $170,000.00. And third, the add-backs needed for a $250,000.00 EBITDA are $250,000.00 − $120,000.00 = $130,000.00; all listed in Accuracy & limitations.

The worked example, line by line

Setup: $120,000 net income, $15,000 interest, $25,000 taxes, $30,000 depreciation, $10,000 amortization, target EBITDA $250,000.00.

Line 1 — the add-backs. The add-backs are $15,000 + $25,000 + $30,000 + $10,000 = $80,000.00.

Line 2 — the EBITDA. The EBITDA is $120,000 + $80,000 = $200,000.00.

Line 3 — the net income needed. The net income needed for a $250,000.00 EBITDA is $250,000.00 − $80,000.00 = $170,000.00.

Line 4 — the add-backs needed. The add-backs needed for a $250,000.00 EBITDA are $250,000.00 − $120,000.00 = $130,000.00.

Line 5 — the check. $170,000.00 + $80,000.00 = $250,000.00, the target EBITDA; and $120,000.00 + $130,000.00 = $250,000.00, the target EBITDA.

Every branch, checked

Net income $70,000: Net income $70,000.00; interest $15,000.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA $150,000.00; net income needed for the $250,000.00 target $170,000.00; add-backs needed for the $250,000.00 target $180,000.00 — With net income of $70,000 the EBITDA falls to $150,000.00 — each $70,000 of net income becomes $150,000 of EBITDA after $80,000 of add-backs.

Net income $170,000: Net income $170,000.00; interest $15,000.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA $250,000.00; net income needed for the $250,000.00 target $170,000.00; add-backs needed for the $250,000.00 target $80,000.00 — With net income of $170,000 the EBITDA rises to $250,000.00 — the target EBITDA, with no net income needed beyond what the business already earns.

Depreciation $80,000: Net income $120,000.00; interest $15,000.00; taxes $25,000.00; depreciation $80,000.00; amortization $10,000.00; EBITDA $250,000.00; net income needed for the $250,000.00 target $120,000.00; add-backs needed for the $250,000.00 target $130,000.00 — With depreciation of $80,000 the EBITDA rises to $250,000.00 — the add-backs are $130,000.00, so $120,000 of net income becomes $250,000 of EBITDA.

Interest $0: Net income $120,000.00; interest $0.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA $185,000.00; net income needed for the $250,000.00 target $185,000.00; add-backs needed for the $250,000.00 target $130,000.00 — With no interest the EBITDA falls to $185,000.00 — the add-backs are $65,000.00, so $120,000 of net income becomes $185,000 of EBITDA.

Net income $70,000, interest $65,000: Net income $70,000.00; interest $65,000.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA $200,000.00; net income needed for the $250,000.00 target $120,000.00; add-backs needed for the $250,000.00 target $180,000.00 — With net income of $70,000 and interest of $65,000 the EBITDA is $200,000.00 — the add-backs are $130,000.00, so $70,000 of net income becomes $200,000 of EBITDA.

All zero: Net income $0.00; interest $0.00; taxes $0.00; depreciation $0.00; amortization $0.00; EBITDA $0.00; net income needed for the $250,000.00 target $250,000.00; add-backs needed for the $250,000.00 target $250,000.00 — With nothing at all the EBITDA is $0.00 — and the net income needed for the $250,000.00 target is the whole $250,000.00.

What-if bars — net income $170,000, interest $65,000, depreciation $80,000: net income $170,000: EBITDA $250,000.00; interest $65,000: EBITDA $250,000.00; depreciation $80,000: EBITDA $250,000.00 — Net income of $170,000 gives an EBITDA of $250,000.00; interest of $65,000 gives an EBITDA of $250,000.00; depreciation of $80,000 gives an EBITDA of $250,000.00.

The reverses, worked backwards

Smallest whole-dollar net income for the EBITDA to reach $200,000.00: At the displayed $120,000 the figures are Net income $120,000.00; interest $15,000.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA $200,000.00; net income needed for the $200,000.00 target $120,000.00; add-backs needed for the $200,000.00 target $80,000.00. At the displayed $120,000 the EBITDA is $200,000.00 (exactly $200,000.00). At $119,999 the net income is 1 dollar short of the $120,000 needed — and the EBITDA is $199,999.00, exactly $1.00 short of the $200,000.00 line — so $120,000 is the smallest whole-dollar net income for the EBITDA to reach $200,000.00.

Smallest whole-dollar net income for the EBITDA to reach $250,000.00: At the displayed $170,000 the figures are Net income $170,000.00; interest $15,000.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA $250,000.00; net income needed for the $250,000.00 target $170,000.00; add-backs needed for the $250,000.00 target $80,000.00. At the displayed $170,000 the EBITDA is $250,000.00 (exactly $250,000.00). At $169,999 the net income is 1 dollar short of the $170,000 needed — and the EBITDA is $249,999.00, exactly $1.00 short of the $250,000.00 line — so $170,000 is the smallest whole-dollar net income for the EBITDA to reach $250,000.00.

Smallest whole-dollar interest for the EBITDA to reach $200,000.00: At the displayed $15,000 the figures are Net income $120,000.00; interest $15,000.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA $200,000.00; net income needed for the $200,000.00 target $120,000.00; add-backs needed for the $200,000.00 target $80,000.00. At the displayed $15,000 the EBITDA is $200,000.00 (exactly $200,000.00). At $14,999 the interest is 1 dollar short of the $15,000 needed — and the EBITDA is $199,999.00, exactly $1.00 short of the $200,000.00 line — so $15,000 is the smallest whole-dollar interest for the EBITDA to reach $200,000.00.

Smallest whole-dollar depreciation for the EBITDA to reach $200,000.00: At the displayed $30,000 the figures are Net income $120,000.00; interest $15,000.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA $200,000.00; net income needed for the $200,000.00 target $120,000.00; add-backs needed for the $200,000.00 target $80,000.00. At the displayed $30,000 the EBITDA is $200,000.00 (exactly $200,000.00). At $29,999 the depreciation is 1 dollar short of the $30,000 needed — and the EBITDA is $199,999.00, exactly $1.00 short of the $200,000.00 line — so $30,000 is the smallest whole-dollar depreciation for the EBITDA to reach $200,000.00.

Smallest whole-dollar amortization for the EBITDA to reach $250,000.00: At the displayed $60,000 the figures are Net income $120,000.00; interest $15,000.00; taxes $25,000.00; depreciation $30,000.00; amortization $60,000.00; EBITDA $250,000.00; net income needed for the $250,000.00 target $120,000.00; add-backs needed for the $250,000.00 target $130,000.00. At the displayed $60,000 the EBITDA is $250,000.00 (exactly $250,000.00). At $59,999 the amortization is 1 dollar short of the $60,000 needed — and the EBITDA is $249,999.00, exactly $1.00 short of the $250,000.00 line — so $60,000 is the smallest whole-dollar amortization for the EBITDA to reach $250,000.00.

Smallest whole-dollar interest for the EBITDA to reach $300,000.00: At the displayed $115,000 the figures are Net income $120,000.00; interest $115,000.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA $300,000.00; net income needed for the $300,000.00 target $120,000.00; add-backs needed for the $300,000.00 target $180,000.00. At the displayed $115,000 the EBITDA is $300,000.00 (exactly $300,000.00). At $114,999 the interest is 1 dollar short of the $115,000 needed — and the EBITDA is $299,999.00, exactly $1.00 short of the $300,000.00 line — so $115,000 is the smallest whole-dollar interest for the EBITDA to reach $300,000.00.

A warning about the neighbours: every neighbour above sits one dollar from the star — $1 of net income, interest, depreciation or amortization — and every neighbour is exactly $1.00 short of the line, with no rounding involved. The rounding trap lives in the edges, not the reverses: net income of $119,999.995 gives an unrounded EBITDA of 199,999.995, which displays as $200,000.00 but is still below the $200,000.00 line — and the add-backs needed are $80,000.01 from an unrounded 80,000.005. The page prints the unrounded values so the rounding does not mislead you: 199,999.995, 80,000.005, 200,000.005 and 79,999.995.

What the defaults assume

The defaults are $120,000 of net income, $15,000 of interest, $25,000 of taxes, $30,000 of depreciation, $10,000 of amortization and a target EBITDA of $250,000.00 — Net income $120,000.00; interest $15,000.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA $200,000.00; net income needed for the $250,000.00 target $170,000.00; add-backs needed for the $250,000.00 target $130,000.00. With Net income $70,000, Net income $70,000.00; interest $15,000.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA $150,000.00; net income needed for the $250,000.00 target $170,000.00; add-backs needed for the $250,000.00 target $180,000.00. With Net income $170,000, Net income $170,000.00; interest $15,000.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA $250,000.00; net income needed for the $250,000.00 target $170,000.00; add-backs needed for the $250,000.00 target $80,000.00. With Depreciation $80,000, Net income $120,000.00; interest $15,000.00; taxes $25,000.00; depreciation $80,000.00; amortization $10,000.00; EBITDA $250,000.00; net income needed for the $250,000.00 target $120,000.00; add-backs needed for the $250,000.00 target $130,000.00. With Interest $0, Net income $120,000.00; interest $0.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA $185,000.00; net income needed for the $250,000.00 target $185,000.00; add-backs needed for the $250,000.00 target $130,000.00. With Net income $70,000, interest $65,000, Net income $70,000.00; interest $65,000.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA $200,000.00; net income needed for the $250,000.00 target $120,000.00; add-backs needed for the $250,000.00 target $180,000.00. With All zero, Net income $0.00; interest $0.00; taxes $0.00; depreciation $0.00; amortization $0.00; EBITDA $0.00; net income needed for the $250,000.00 target $250,000.00; add-backs needed for the $250,000.00 target $250,000.00. With What-if bars — net income $170,000, interest $65,000, depreciation $80,000, net income $170,000: EBITDA $250,000.00; interest $65,000: EBITDA $250,000.00; depreciation $80,000: EBITDA $250,000.00. With All zero, Net income $0.00; interest $0.00; taxes $0.00; depreciation $0.00; amortization $0.00; EBITDA $0.00; net income needed for the $250,000.00 target $250,000.00; add-backs needed for the $250,000.00 target $250,000.00. With Net income $0, Net income $0.00; interest $15,000.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA $80,000.00; net income needed for the $250,000.00 target $170,000.00; add-backs needed for the $250,000.00 target $250,000.00. With Net income $119,999.995, Net income $120,000.00; interest $15,000.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA $200,000.00; net income needed for the $200,000.00 target $120,000.00; add-backs needed for the $200,000.00 target $80,000.01 (unrounded EBITDA 199,999.995; unrounded add-backs needed 80,000.005). With Net income $120,000.005, Net income $120,000.01; interest $15,000.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA $200,000.01; net income needed for the $200,000.00 target $120,000.00; add-backs needed for the $200,000.00 target $80,000.00 (unrounded EBITDA 200,000.005; unrounded add-backs needed 79,999.995). With Net income $9,999,999, Net income $9,999,999.00; interest $15,000.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA $10,079,999.00; net income needed for the $250,000.00 target $170,000.00; add-backs needed for the $250,000.00 target -$9,749,999.00. With Net income −$20,000, Net income -$20,000.00; interest $15,000.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA $60,000.00; net income needed for the $250,000.00 target $170,000.00; add-backs needed for the $250,000.00 target $270,000.00. With Net income −$100,000, Net income -$100,000.00; interest $15,000.00; taxes $25,000.00; depreciation $30,000.00; amortization $10,000.00; EBITDA -$20,000.00; net income needed for the $250,000.00 target $170,000.00; add-backs needed for the $250,000.00 target $350,000.00 (negative EBITDA, shown with a note, never hidden). With EBITDA bars, net income $170,000: EBITDA $250,000.00; interest $65,000: EBITDA $250,000.00; depreciation $80,000: EBITDA $250,000.00.

A note on the rounding: with net income of $119,999.995 the unrounded EBITDA is 199,999.995, which rounds half-up to $200,000.00 — but it is still below the $200,000.00 line. The add-backs needed are $80,000.01 from an unrounded 80,000.005. With net income of $120,000.005 the unrounded EBITDA is 200,000.005, which rounds half-up to $200,000.01 — and the add-backs needed are $80,000.00 from an unrounded 79,999.995. The page prints the unrounded values so the rounding does not mislead you.

Output · formula · meaning

Who uses this

• The investor checking a company before buying: they learn $120,000 of net income with $80,000 of add-backs is a $200,000.00 EBITDA — and they check the $120,000 reverse to see the net income a $200,000.00 EBITDA needs.
• The owner pricing their own business: they learn a $250,000.00 EBITDA needs $170,000.00 of net income with $80,000.00 of add-backs — and they check the $170,000 reverse to see the net income a $250,000.00 EBITDA needs.
• The analyst comparing two companies in one industry: they learn a $200,000.00 EBITDA in a grocery chain and a $200,000.00 EBITDA in a software company are different stories — and they check the $60,000 reverse to see the amortization a $250,000.00 EBITDA needs.
• The student learning profitability measures: they learn the EBITDA is net income plus interest, taxes, depreciation and amortization — and they check the $115,000 reverse to see the interest a $300,000.00 EBITDA needs.

Accuracy & limitations

The math is first-principles: the EBITDA is net income + interest + taxes + depreciation + amortization; the net income needed for the target is the target EBITDA minus the add-backs; the add-backs needed for the target are the target EBITDA minus the net income — all rounded to two decimals half-up. The reverses are judged on the UNROUNDED EBITDA: a neighbour one dollar short shows as the target when rounded to two decimals, but its unrounded EBITDA is below the target, so it does not meet the bar — the page prints the unrounded value in full. A negative EBITDA means negative operating profit: at −$100,000 of net income the EBITDA is −$20,000.00 (unrounded −20000) — a negative EBITDA means the business is losing money on its day-to-day work before interest and tax — and a negative EBITDA is not a bargain signal, it is a distress signal — so the EBITDA is negative and the calculator shows the negative figure with a note, never hides it. A negative net income is legitimate: at −$20,000 of net income the EBITDA is $60,000.00, because the $80,000.00 of add-backs more than cover the loss. What the model cannot do is judge the business: EBITDA is not cash flow — it ignores the capital expenditure the business needs to keep running, so a high EBITDA built on a capital-hungry business flatters it, so check what the business must spend to keep running; it also ignores interest and tax, so a business loaded with debt can show strong EBITDA while its lenders take most of it; and the EBITDA says nothing about debt, buybacks, dividends, or the quality of the operating profit. Use it to see the operating profit before interest, taxes, depreciation and amortization — then read the rest of the accounts.

Frequently asked questions