{
  "slug": "ebitda",
  "title": "EBITDA and Valuation Calculator",
  "heading": "EBITDA and Valuation Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/ebitda",
  "summary": "EBITDA, margin, and a multiple-based business valuation.",
  "description": "Small businesses trade on a multiple of EBITDA or seller's discretionary earnings. Add back the owner's above-market salary and one-off costs before applying a multiple, or you will undervalue the business.",
  "formula": "EBITDA = Net income + Interest + Tax + Depreciation + Amortisation. Value = EBITDA × Multiple.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=ebitda",
  "inputs": [
    {
      "id": "revenue",
      "label": "Annual revenue",
      "kind": "number",
      "hint": null,
      "default": 2400000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "netIncome",
      "label": "Net income",
      "kind": "number",
      "hint": null,
      "default": 310000,
      "unit": "$",
      "min": -1000000,
      "max": null
    },
    {
      "id": "interest",
      "label": "Interest expense",
      "kind": "number",
      "hint": null,
      "default": 24000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "tax",
      "label": "Taxes",
      "kind": "number",
      "hint": null,
      "default": 78000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "depreciation",
      "label": "Depreciation and amortisation",
      "kind": "number",
      "hint": null,
      "default": 46000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "addBacks",
      "label": "Owner add-backs",
      "kind": "number",
      "hint": null,
      "default": 60000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "multiple",
      "label": "Valuation multiple",
      "kind": "number",
      "hint": null,
      "default": 4,
      "unit": null,
      "min": 0.5,
      "max": 20
    }
  ],
  "outputs": [
    {
      "id": "valuation",
      "label": "Estimated business value",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "ebitda",
      "label": "EBITDA",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "adjusted",
      "label": "Adjusted EBITDA",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "margin",
      "label": "EBITDA margin",
      "format": "percent",
      "hint": null,
      "primary": false
    },
    {
      "id": "revenueMultiple",
      "label": "Implied revenue multiple",
      "format": "decimal",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Annual revenue: 2400000 $",
      "Net income: 310000 $",
      "Interest expense: 24000 $",
      "Taxes: 78000 $",
      "Depreciation and amortisation: 46000 $",
      "Owner add-backs: 60000 $",
      "Valuation multiple: 4"
    ],
    "outputs": [
      "Estimated business value: $2,072,000.00",
      "EBITDA: $458,000.00",
      "Adjusted EBITDA: $518,000.00",
      "EBITDA margin: 19.08%",
      "Implied revenue multiple: 0.86"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter annual revenue ($).",
      "Enter net income ($).",
      "Enter interest expense ($).",
      "Enter taxes ($).",
      "Enter depreciation and amortisation ($).",
      "Enter owner add-backs ($).",
      "Enter valuation multiple.",
      "Read your estimated business value on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "revenue": 1450000,
        "netIncome": 190000,
        "interest": 14000,
        "tax": 47000,
        "depreciation": 28000,
        "addBacks": 35000,
        "multiple": 2.4
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "revenue": 2400000,
        "netIncome": 310000,
        "interest": 24000,
        "tax": 78000,
        "depreciation": 46000,
        "addBacks": 60000,
        "multiple": 4
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "revenue": 3850000,
        "netIncome": 500000,
        "interest": 38000,
        "tax": 125000,
        "depreciation": 74000,
        "addBacks": 95000,
        "multiple": 6.4
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "How does the ebitda and valuation calculator work?",
      "a": "Small businesses trade on a multiple of EBITDA or seller's discretionary earnings. Add back the owner's above-market salary and one-off costs before applying a multiple, or you will undervalue the business. The underlying maths is: EBITDA = Net income + Interest + Tax + Depreciation + Amortisation. Value = EBITDA × Multiple."
    },
    {
      "q": "What do I need to enter?",
      "a": "7 values: annual revenue, net income, interest expense, taxes, depreciation and amortisation, owner add-backs, and valuation multiple. Each field starts with a sensible default, so you can change one number at a time and watch the result move."
    },
    {
      "q": "What does the estimated business value result mean?",
      "a": "It is returned as a money amount in US dollars and updates live as you edit the inputs, so you can compare two or three versions of a scenario in a few seconds."
    },
    {
      "q": "Is this calculator free, and do I need an account?",
      "a": "Yes, it's free, and no account is required. Nothing you type is stored on our servers — the maths runs entirely in your browser."
    },
    {
      "q": "How accurate is the result?",
      "a": "It applies the standard formula exactly, so the arithmetic is precise. Results are estimates before tax, fees, and inflation unless an input explicitly covers them."
    },
    {
      "q": "Who is this tool for?",
      "a": "It's built for anyone comparing money scenarios before committing — budgeting a payment, sanity-checking a quote, or seeing what a change in rate or term actually costs."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/margin",
    "https://www.revenuelab.fyi/toolbox/burn-rate",
    "https://www.revenuelab.fyi/toolbox/roi"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — EBITDA and Valuation Calculator (https://www.revenuelab.fyi/toolbox/ebitda)"
}