Calculate Earnings Before Interest, Taxes, Depreciation, and Amortization to evaluate operational performance.
Financial Inputs
EBITDA Results
EBITDA$1,450,000
EBIT$1,250,000
Add-backs$200,000
Components of EBITDA
About this calculator
Overview
Calculate Earnings Before Interest, Taxes, Depreciation, and Amortization to evaluate operational performance.
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Pro Tips
What is EBITDA?: EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's overall financial performance and is used as an alternative to simple earnings or net income in some circumstances.
Why is EBITDA useful?: It strips away the effects of financing (interest), government (taxes), and non-cash accounting items (depreciation/amortization), allowing for a better comparison of operational efficiency between companies.
What is the difference between EBIT and EBITDA?: EBIT (Earnings Before Interest and Taxes) includes depreciation and amortization expenses, while EBITDA adds them back in.
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Fun Facts
"EBITDA was popularized by John Malone and cable TV companies in the 1970s to justify high debt loads."
"Warren Buffett is famously skeptical of EBITDA, calling it 'bullsh*t earnings' because it ignores the real cost of capital expenditures (depreciation)."
"EBITDA is frequently used in business valuation as a 'multiple' (e.g., a company might sell for 8x EBITDA)."
