EBITDA calculator

Add interest, tax, depreciation and amortisation back to your net profit to find EBITDA — and your EBITDA margin.

Your figures

Net profit (£)

Bottom-line profit after interest and tax.

Interest (£)

Tax (£)

Depreciation (£)

Amortisation (£)

Revenue (£, optional)

Add turnover to see your EBITDA margin.

Your result

EBITDA

£0

Net profit: £0
+ Interest: £0
+ Tax: £0
+ Depreciation: £0
+ Amortisation: £0
EBITDA: £0
EBITDA margin: 0%

Get sale-ready numbers

An estimate from the figures you enter. A formal EBITDA for a sale or funding round is often ‘adjusted’ for one-off and owner costs — something we prepare as part of valuation and management accounts work.

EBITDA — earnings before interest, tax, depreciation and amortisation — strips out the effects of financing, tax and accounting choices to show the underlying profitability of the trade itself. It’s the figure buyers, investors and lenders lean on, because it lets them compare businesses on a like-for-like basis. Enter your profit and the items to add back to see it.

What EBITDA is for

By adding back the four items that vary most between businesses — financing, tax, and the depreciation and amortisation of assets — EBITDA shows the earning power of the trade itself:

EBITDA = Net profit + Interest + Tax + Depreciation + Amortisation

It’s the foundation of most business valuations, which are often quoted as a multiple of EBITDA — so a higher, well-evidenced EBITDA directly raises what your business is worth.

EBITDA isn’t cash

A high EBITDA doesn’t guarantee money in the bank. It ignores the interest and tax you genuinely pay, the cost of replacing worn-out assets, and changes in working capital — all real cash demands.

Used well it’s a powerful comparison tool; used carelessly it flatters a business. When you’re preparing to sell or raise funds, our management accounts turn it into a credible, adjusted figure a buyer will trust.

In plain English

The terms, explained

New to this? Here’s what the words on this page actually mean.

EBITDA: Earnings Before Interest, Tax, Depreciation and Amortisation — operating profitability before financing and accounting effects.
Net profit: Your bottom-line profit after everything, including interest and tax — the starting point here.
Depreciation: The yearly write-down of physical assets like equipment and vehicles as they wear out.
Amortisation: The same idea for intangible assets — goodwill, software, patents — spread over their useful life.
EBITDA margin: EBITDA as a percentage of revenue — how much of every pound of sales becomes operating earnings.

FAQ

EBITDA calculator — your questions answered

How do I calculate EBITDA?

Start with net profit and add back the interest, tax, depreciation and amortisation that were deducted to reach it. So EBITDA = net profit + interest + tax + depreciation + amortisation. Enter each figure above and it’s totalled for you, along with your EBITDA margin.

What is the difference between EBITDA and net profit?

Net profit is what’s left after every cost, including interest, tax and the depreciation of assets. EBITDA adds those back to show the cash-generating performance of the trade itself, independent of how the business is financed or taxed — which is why it’s used to compare companies.

What is a good EBITDA margin?

It varies by sector, but broadly a 10% EBITDA margin is modest, around 20% is healthy and above that is strong. Asset-light service businesses tend to run higher margins than capital-intensive ones. Compare yours against others in your industry rather than a universal benchmark.

Why do buyers and lenders use EBITDA?

Because it removes differences in financing, tax position and depreciation policy, EBITDA lets them compare the underlying earnings of different businesses and is the basis for most valuation multiples (e.g. “4× EBITDA”). It’s the headline number in most business sales and funding decisions.

What is adjusted EBITDA?

Adjusted EBITDA also strips out one-off and non-recurring items — an owner’s above-market salary, legal costs, a one-time write-off — to show normalised earnings a new owner would expect. Preparing a credible adjusted EBITDA is part of getting a business ready to sell or raise funds, which we can help with.

Need a hand with this?

We can do it properly for you

A calculator gives you a number; we give you a plan to pay less. Explore the services and specialists this relates to:

Management accounts service Accounts & Corporation Tax Tax planning service

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