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EBITDA Calculator

Get a Better Picture of Your Business’s Profitability

EBITDA—Earnings Before Interest, Taxes, Depreciation, and Amortization—is a key measure of your company’s financial performance. It provides a strong snapshot of your business’s operating profitability by removing variables that may obscure its core earnings potential. Understanding your EBITDA is crucial whether you’re preparing for an Exit, seeking financing, or evaluating growth opportunities.

The calculator on this page helps you calculate your EBITDA and your EBITDA margin—the latter of which is a critical metric that shows EBITDA as a percentage of your total revenue. This ratio gives insight into operational efficiency and helps you benchmark against other companies in your industry.

Why Use Quist Valuation’s EBITDA Calculator?

There are dozens of EBITDA calculators online, but most offer only a surface-level calculation. At Quist Valuation, we wanted to design a calculator that would give you the most accurate and meaningful picture of your EBITDA.

If you have any questions about how EBITDA is calculated, any of the fields you need to fill out, or how to interpret your results, check out our FAQs at the bottom of the page!

Total profit after all expenses and taxes. Starting point for the calculation.
Interest paid on company debt.
Amount of taxes paid on company profits.
Non-cash expense reflecting wear/tear of fixed assets.
Non-cash expense of intangible asset usage.
Extraordinary expenses not expected to recur.
Extraordinary income not expected to recur.

FAQs

What is owners compensation and why does it matter?

Owner compensation refers to how much the business owner is paying themselves through salary, bonuses, or profit distributions. It’s a key number because it often doesn’t reflect what a typical employee in that role would earn—and that can skew EBITDA.

For example:

If you’re paying yourself $50,000 but the market rate for someone doing your job is $150,000, your compensation is $100,000 below market (input -$100,000 into the calculator above).

If you’re paying yourself $250,000 for a role that usually earns $150,000, your compensation is $100,000 above market (input +$100,000 into the calculator above).

This adjustment matters because buyers or valuation experts want to know what it would cost to replace you with a non-owner employee. It helps normalize your company’s profitability.

Some small business owners don’t pay themselves a salary at all. Instead, they take profit distributions to keep the income statement looking more profitable. That’s fine—but it still needs to be factored in when calculating EBITDA.

Bottom line: Whether your compensation is above or below market rate, it impacts the perceived profitability of your business. It’s not about right or wrong—it’s about making your financials apples-to-apples for comparison and valuation.

How do I go about calculating amortization and depreciation?

Amortization and depreciation are accounting terms for spreading the cost of things your business owns over time.

  • Depreciation is for physical items like equipment, vehicles, or buildings.
  • Amortization is for intangible assets like trademarks, software, or goodwill from a business acquisition.

Quick method:
If you don’t have exact numbers handy, look at your most recent tax return or income statement—these are usually listed under expenses. Or, talk to your bookkeeper or CPA and ask, “What were my depreciation and amortization expenses last year?”

If you’re short on time, just estimate. Think about the big assets you’ve bought and roughly divide their cost by their useful life. For example, if you bought a truck for $50,000 and expect it to last 5 years, that’s about $10,000 per year in depreciation.

What are some examples of a one-time expense?

One-time expenses are unusual costs that don’t happen regularly in your business. These might include:

  • Legal fees from a lawsuit
  • Costs related to moving locations
  • Emergency repairs from a flood or fire
  • Consulting or strategy fees tied to a one-time event
  • Severance payments after a layoff

If it’s not something you expect to spend money on every year, it might be a one-time expense.

What are some examples of one-time income?

One-time income is money your business makes from something outside of normal operations. This could include:

  • Selling a piece of equipment or property
  • Receiving an insurance payout
  • Government grants or relief funds
  • A legal settlement your business receives

Basically, if it’s not money you expect to earn again through regular business, it likely counts as one-time income.

How do you determine if something is a discretionary expense?

Discretionary expenses are costs that the business could cut without hurting operations. These are usually tied to the owner’s preferences or lifestyle. Examples include:

  • Owner’s car lease or travel
  • Country club or golf memberships
  • Meals and entertainment
  • Personal expenses run through the business

A good rule of thumb: If you wouldn’t pay someone else to do it, or your business could run just fine without it, it’s probably discretionary.

How do you find the amount of owner compensation above or below market? What about rent?

Owner Compensation:

Start by asking: What would I have to pay someone else to do my job? If you’re paying yourself significantly more or less, the difference is what you enter.

To get a ballpark estimate, you can:

  • Search salary sites like Glassdoor or Indeed for your role and industry
  • Ask your CPA or advisor for a benchmark
  • Talk to peers in similar businesses

Rent:

If your business rents from a property you or a family member owns, compare what you’re paying to similar spaces in your area. The difference between what you pay and the market rate is what you enter.

You can:

  • Check commercial real estate listings in your area
  • Ask a broker for a quick comparison
  • Look at past lease offers or appraisal