EBITDA Calculator
Calculate EBITDA from net income or operating income, the EBITDA margin, and a business value range from an EBITDA multiple you choose. Add the owner's add-backs for adjusted EBITDA, and see the working line by line.
Your numbers
The bottom line of the income statement. A loss is negative.
Interest on loans and leases, as on the income statement.
Income tax expense; a tax benefit is negative.
Sales for the same period, for the EBITDA margin.
From the buyer, the broker or a valuation. None is assumed.
Owner add-backs (optional)
Costs a new owner would not carry: pay above market, one-off bills, personal expenses. A negative amount takes something out.
Up to 10 add-backs. Names stay on this page and are not put in the address.
EBITDA
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- EBIT
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EBITDA is not a GAAP measure and not cash flow: it leaves out capital spending, working capital, and the interest and tax actually paid.
Multiples vary by industry, size, growth and deal terms. A guide, not financial, tax or legal advice.
The calculation runs in your browser and ParrotNotes does not store your numbers. They sit in the page address so you can bookmark or share the result.
How EBITDA is calculated
EBITDA stands for earnings before interest, taxes, depreciation and amortization. In its guidance on non-GAAP measures, the SEC staff reads "earnings" as net income, so the first method starts from the bottom line: net income + interest expense + income taxes gives EBIT, and EBIT + depreciation + amortization gives EBITDA. A loss is typed as a negative number, and so is a tax benefit.
The second method starts from operating income, the line before interest and taxes on many income statements: operating income + depreciation + amortization. The two give the same figure when nothing sits between operating income and the interest and tax lines. When the statement has other income or expense, a gain on a sale or a one-off loss below operating income, they differ; the net income method follows the SEC's reading.
Adjusted EBITDA and owner add-backs
A small business's books carry the owner's choices: a salary above or below what a hired manager would cost, a family member on the payroll, a car, a one-off lawsuit. Buyers and brokers add these back to show what the business earns under a new owner. List each add-back with what it is and the amount; type a negative amount for something to take out, such as rent paid to the owner below market. Keep the paperwork for each one: a buyer will ask.
The SEC staff says a measure calculated differently from EBITDA should not be called EBITDA but something distinct, such as Adjusted EBITDA. The calculator shows both, and values the business on the adjusted figure when there are add-backs.
EBITDA margin and an EBITDA multiple
EBITDA margin = EBITDA ÷ revenue × 100. It shows how much of each dollar of sales is left before interest, taxes, depreciation and amortization, and lets you compare a business with others of a different size.
A value from an EBITDA multiple is (adjusted) EBITDA × the multiple. Type a low and a high multiple to see a range; the calculator assumes none, because multiples vary by industry, size, growth, customer concentration, how much depends on the owner and the terms of the deal. Take them from the buyer, a business broker or a valuation professional, and treat the result as a starting point for that conversation.
For brokers and owners preparing to sell
A business broker or a commercial real estate agent listing an owner-operated business builds the asking price from adjusted EBITDA. Work through the income statement with the owner line by line, agree each add-back and why it is there, and write down the source for each number. When the buyer's accountant asks, the answer is in the notes rather than in someone's memory.
What this calculator does not do
It adds up the numbers you type for one period; it does not read financial statements, check that add-backs are reasonable or say what a business is worth. Depreciation and amortization come from the income statement or the notes to it. The result is a guide, not financial, tax or legal advice.
Sources, each read on 2026-10-28:
More for brokers and client meetings: Commercial real estate broker, Investor meeting notes, Financial advisor client meeting notes, Consultant meeting notes.
Add-backs get agreed in the meeting
The add-backs are agreed in the owner meeting and questioned on the buyer call: the owner's salary, a one-off legal bill, the family car. Record those conversations in ParrotNotes and get a note, a summary and the action items, so each add-back and the reason for it is in the notes. Free for 100 minutes of recording a month.
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