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EBITDA Calculator — Business Valuation Tool

Calculate EBITDA and estimate your business valuation range using industry-standard revenue multiples. Used by M&A advisors and business buyers.

Annual Revenue ($)

Cost of Goods Sold ($)

Operating Expenses ($)

Depreciation ($)

Amortization ($)

Interest Expense ($)

Income Taxes ($)

Industry

EBITDA

$870,000

Margin: 43.5%

Gross Profit

$1,200,000

EBIT

$800,000

Base Valuation

$3.48M

EV Range

$1.74M–$5.22M

Profitability Waterfall

Business Valuation Range — Professional Services (2×–6× EBITDA)

Analysis & insights

Your EBITDA: $870,000 (43.5% margin on $2,000,000 revenue). Industry-multiple valuation range: $1,740,000 (conservative) → $3,480,000 (base case) → $5,220,000 (optimistic). EBITDA isolates the operating performance from financing decisions (interest) and accounting choices (D&A) — it's the universal comparison metric for businesses sold to non-operator buyers (PE, strategics).

Exceptional margin

Premium — software, SaaS, or category-leading brands. Highly attractive to buyers.

Risk & benchmark gauge

Current band

Exceptional

43.5% EBITDA margin

0255075100

Below avgHealthyStrongExceptional

Industry benchmarks

EBITDA$870,000
EBITDA margin43.5%
Valuation (low)$1,740,000
Valuation (base)$3,480,000
Valuation (high)$5,220,000
Industry median (services)10-15% EBITDA margin
SaaS / software20-30%+

Key insights

EBITDA ≠ cash flow

EBITDA ignores capex, working capital changes, and taxes. A company with $10M EBITDA might have $0 free cash flow if it requires $10M/yr in capex to maintain.

EBITDA growth > absolute EBITDA

A $2M EBITDA growing 30%/year often trades at higher multiple than a flat $5M EBITDA. Buyers price growth heavily.

"Adjusted EBITDA" is where seller storytelling lives

Add-backs (owner salary, discretionary expenses, one-time items) often inflate adjusted EBITDA by 20-50%. Buyers heavily scrutinize each adjustment.

Recommended actions(3)

Track EBITDA monthly with clean adjustments

High priority

Document every add-back with supporting context (one-time vs recurring, owner-specific vs operational). Makes the eventual sale process dramatically faster.

Build a quality of earnings package

Medium priority

Pre-sale, hire a CPA firm to produce a Quality of Earnings (QofE) report — defends EBITDA add-backs to buyers and supports premium pricing.

Reduce customer concentration

Medium priority

Buyers discount EBITDA multiples by 20-40% when one customer is >25% of revenue. Diversify 12-24 months before listing.

What is EBITDA & Business Valuation?

EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortization) is the most widely used metric for valuing privately held businesses. It normalizes earnings by removing financing and accounting decisions.

Business value = EBITDA × Industry Multiple. The multiple varies by industry, growth rate, customer concentration, and deal size.

Frequently Asked Questions

Sources & References

This tool is for educational purposes only and does not constitute financial, tax, or investment advice. Consult a qualified financial professional for advice specific to your situation.

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