Accounting EBITDA (Annual) Calculator
Calculate annual EBITDA, EBITDA margin and operating profit from revenue, costs, other operating income and depreciation and amortization.
Overview
This annual EBITDA calculator estimates earnings before interest, taxes, depreciation and amortization using your annual revenue, direct costs, operating expenses and other operating income. It also shows EBITDA margin and EBIT to help you compare operating results.
How it works
The calculator starts with annual revenue and subtracts cost of goods sold to calculate gross profit. It then subtracts operating expenses and adds other operating income to estimate EBITDA. Depreciation and amortization are not deducted from EBITDA; subtracting them from EBITDA produces EBIT. EBITDA margin is calculated by dividing EBITDA by annual revenue.
How to use this calculator
- 1Enter total revenue for the financial year.
- 2Add direct costs or cost of goods sold, excluding depreciation and amortization.
- 3Enter annual operating expenses, also excluding depreciation and amortization.
- 4Add recurring other operating income, if applicable.
- 5Enter depreciation and amortization to view the related EBIT figure.
- 6Review annual EBITDA, margin and supporting operating results.
Example Calculation
Annual revenue
$1,000,000
Annual cost of goods sold
$420,000
Annual operating expenses
$260,000
Other operating income
$10,000
Depreciation and amortization
$50,000
Annual EBITDA
$330,000
With $1,000,000 of revenue, $420,000 of direct costs, $260,000 of operating expenses and $10,000 of other operating income, estimated EBITDA is $330,000. This equals a 33.0% EBITDA margin; after $50,000 of depreciation and amortization, EBIT is $280,000.
Frequently asked questions
What is annual EBITDA?
Annual EBITDA is a business's earnings over a 12-month period before interest, taxes, depreciation and amortization. It is commonly used as an operating performance measure.
How do you calculate EBITDA from revenue?
A simple operating approach is revenue minus direct costs minus operating expenses, plus other operating income, while excluding depreciation and amortization from those costs.
Is EBITDA the same as profit?
No. EBITDA excludes interest, taxes, depreciation and amortization, so it is not the same as net profit or operating profit after depreciation and amortization.
What is a good EBITDA margin?
A suitable EBITDA margin varies widely by industry, business model, company size and accounting policies. Comparing similar businesses over time is generally more useful than using one universal benchmark.
Should depreciation be included in operating expenses for this calculator?
No. Enter depreciation and amortization separately. If they are included in operating expenses, EBITDA would be understated because the calculator subtracts them only when calculating EBIT.
Does EBITDA include interest and tax?
No. Interest and taxes are excluded from EBITDA. They are considered after EBITDA when moving toward net income.
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Assumptions and warnings
Assumptions
- All figures relate to the same 12-month accounting period and use the same currency.
- Cost of goods sold and operating expenses exclude depreciation and amortization to avoid double counting.
- Interest expense, taxes, financing gains or losses, and non-operating items are excluded from EBITDA.
- The result is an estimate based on the classification and completeness of the figures entered.
Warnings
- This calculator provides an estimate only and is not accounting, tax, or financial advice.
- EBITDA definitions and permitted adjustments can differ between businesses, lenders, investors, and reporting frameworks.