EBITDA is an acronym for earnings before interest, taxes, depreciation, and amortization. It is a measure of profitability that eliminates variations caused by financing and tax strategies.
EBITDA & Adjusted EBITDA Calculator
Enter your information below and click on the Calculate EBITDA button. Your EBITDA will display and you will then be prompted to enter additional information to calculate your Adjusted EBITDA.
Adjusted EBITDA
Owner's discretionary expenses, normalized expenses, and extraordinary expenses are added to EBITDA to determine Adjusted EBITDA. Owner's discretionary expenses are incurred by an owner for their benefit. As such, a buyer will not incur these same expenses. Enter your information below.
Expenses that are considered not normal must be adjusted to become “normalized.” Normalization adjustments are an important part of business valuation and are necessary to ensure that a company's financial statements accurately reflect its anticipated profit or loss.
Enter the total of any expenses in excess of what would normally have been incurred last year. Examples include: The difference between the current owner salary vs. a CEO salary at fair market value, manager compensation, rent above market rate, exceptionally large bonuses, etc.
Extraordinary expenses are one-time or company specific expenses that the buyer will not incur.
Enter the total of any extraordinary expenses incurred last year. Examples include: lawsuit settlements, asset write offs, sales write offs, capital, legal, accounting, consulting, etc.