Free Tool
EBITDA Calculator
Earnings before interest, taxes, depreciation and amortisation — the measure buyers use for businesses that already run under management.
How It Works
Strip Out Financing and Accounting Effects
Interest depends on how the business is financed. Tax depends on its structure. Depreciation and amortisation are accounting entries rather than cash costs. Removing all four leaves a figure that can be compared between businesses.
Unlike SDE, EBITDA leaves management cost in. If you pay yourself below market for the hours you work, adjust for that shortfall — otherwise the earnings look better than they are.
Common questions
- Should I use EBITDA or SDE?
- EBITDA suits businesses already run by paid management. If you work in the business and take your living from it, SDE is usually the right measure.
- What is the owner compensation adjustment for?
- If you pay yourself less than the market rate for the work you do, reported earnings are flattered. Deducting the shortfall shows what the business really earns under management.
- Is my data stored?
- No. The calculation happens in your browser and nothing is sent to us.
After tax, from your accounts
Non-recurring items a buyer will not inherit
Add the shortfall to a market wage as a negative effect
Adjusted EBITDA
$0
This calculation runs in your browser. Nothing is sent to us or saved. It is a working figure, not a valuation.
Turn earnings into a value
See a preliminary range for the business, with any property shown separately.