EBITDA Calculator
Calculate your company's Earnings Before Interest, Taxes, Depreciation, and Amortization
EBITDA
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EBITDA Margin
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Total Expenses
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EBITDA
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What is EBITDA?
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a financial metric that measures a company's profitability, excluding non-operating expenses such as interest, taxes, and non-cash charges.
Please Note: However, it is important to note that EBITDA is not a universally accepted financial metric, and some critics argue that it can be misleading because it does not take into account some important expenses such as depreciation and amortization. Therefore, it is recommended to use EBITDA in conjunction with other financial metrics to get a comprehensive picture of a company's financial performance.
What is an EBITDA Calculator?
An EBITDA calculator is a tool used to calculate a company's EBITDA by entering its revenue and expenses. The calculator subtracts expenses such as taxes, interest, depreciation, and amortization to arrive at the EBITDA.
Why should you use an EBITDA Calculator?
- Easy and accurate calculation of EBITDA
- Better understanding of a company's financial performance
- Comparison of financial performance with competitors
- Helps in making informed business decisions
- Facilitates budgeting and forecasting by providing a benchmark for future performance
How does EBITDA Calculator Work?
It typically requires input of revenue and expenses, and the calculator then performs the following calculation to arrive at the EBITDA:
EBITDA = Sales - (Raw Material Cost + Employee Costs + Other Operating expenses)
Example Calculation
Let's assume a company has the following financial data:
- Sales: ₹1,00,000
- Raw Material Cost: ₹25,000
- Employee Costs: ₹45,000
- Operating expenses: ₹10,000
The EBITDA calculation for this company would be as follows:
EBITDA = Sales - (Raw Material Cost + Employee Costs + Other Operating expenses)
EBITDA = 1,00,000 - 80,000
EBITDA = 20,000 i.e 20%
In this example, the company's EBITDA is ₹20,000 which is 20%, which represents its earnings before deducting expenses such as Raw Material Cost, Employee Costs, and Operating expenses. This information can be useful for investors and analysts who want to assess a company's profitability without considering financing and accounting decisions.