Calculate EBITDA, EBITDA margin, and EV/EBITDA multiples from financial data with add-back adjustments and comparison tables.
Start with reported earnings and bridge to EBITDA by adding back interest, income taxes, depreciation, and amortization. The calculator can then incorporate separately entered adjustments, express the result as a percentage of revenue, and divide enterprise value by EBITDA for valuation comparison. The common trap is mixing bases: an adjusted EBITDA figure should not be compared with an unadjusted figure, and a multiple based on enterprise value is not the same as a price-to-earnings ratio.
A concrete input and expected output from the current implementation.
Input
Revenue: $1,000,000 Net income: $120,000 Interest expense: $30,000 Income tax expense: $40,000 Depreciation: $25,000 Amortization: $5,000 Add-back adjustments: $20,000 Enterprise value: $1,200,000
Expected output
EBITDA: $220,000; EBITDA margin: 22.00%; adjusted EBITDA: $240,000; adjusted EBITDA margin: 24.00%; EV/EBITDA: 5.45x; EV/adjusted EBITDA: 5.00x.
Base EBITDA is $120,000 + $30,000 + $40,000 + $25,000 + $5,000 = $220,000. Adding $20,000 produces $240,000; dividing each result by $1,000,000 gives the margins, while dividing $1,200,000 by each result gives the multiples.
The earnings bridge begins with net income and adds interest expense, income tax expense, depreciation, and amortization for the same reporting period. The sum is base EBITDA. Separately entered add-back adjustments are then added to base EBITDA to produce adjusted EBITDA, allowing the unadjusted and adjusted results to remain distinct in the comparison.
EBITDA margin equals EBITDA divided by revenue and is shown as a percentage. EV/EBITDA equals enterprise value divided by EBITDA and is shown as a multiple; using adjusted EBITDA produces a separate adjusted multiple. This differs from ratios that compare equity value with earnings available to common shareholders.
Yes, but only once. Enter the combined D&A amount in a combined field if available, or split it between depreciation and amortization so the two entries sum to the reported total. Do not enter the combined total and repeat its components, because that would overstate EBITDA.
No. The multiple is only a ratio of enterprise value to the selected EBITDA measure. Differences in growth, risk, accounting policies, lease treatment, cyclicality, and adjustment choices can make two multiples non-comparable. The ratio is also undefined when EBITDA is zero and usually unhelpful when EBITDA is negative.
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