EBITDA Calculator

EBITDA Calculator

Use our EBITDA calculator to estimate your business’s earnings before interest, taxes, depreciation, and amortization. This metric is one of the most widely used benchmarks by buyers, lenders, and investors when assessing business performance and value.

How to Read Your EBITDA Result

Your EBITDA figure provides a high-level snapshot of operating profitability before financing, tax structure, and accounting methods are applied.

Positive EBITDA

A positive result indicates your core operations are profitable before non-operating expenses. This is typically a baseline requirement for most buyers and lenders.

Low or Marginal EBITDA

Lower EBITDA can reflect reinvestment, growth phases, owner compensation structure, or industry-specific cost profiles. Context matters.

Negative EBITDA

A negative result does not automatically mean a business is unsellable. Many owner-operated or growth-focused businesses improve EBITDA significantly after adjustments.

What’s Included and Excluded in EBITDA

Included in EBITDA

  • Revenue from operations
  • Cost of goods sold
  • Operating expenses

Excluded from EBITDA

  • Interest and financing costs
  • Income taxes
  • Depreciation and amortization
  • One-time or non-recurring expenses

EBITDA vs. Adjusted EBITDA (What Buyers Actually Use)

EBITDA is a starting point — Adjusted EBITDA is what most buyers base value on. Adjusted EBITDA accounts for legitimate add-backs that reflect the true earning power of the business once ownership changes.

Common add-backs include:

  • Owner salary or benefits above market rates
  • Personal or discretionary expenses
  • One-time legal, consulting, or renovation costs
  • Non-recurring events or temporary disruptions

Most business owners underestimate their true EBITDA before add-backs are applied.

What Your EBITDA Could Mean for Business Value

In Canada, small and mid-market businesses typically sell for a multiple of EBITDA, depending on industry, risk profile, and growth potential.

General market ranges:

  • Service businesses: 3.0× – 4.5× EBITDA
  • Construction & trades: 2.5× – 4.0× EBITDA
  • Franchise operations: 3.5× – 5.5× EBITDA
  • Manufacturing: 4.0× – 6.0× EBITDA

These ranges are indicative only. Actual value depends on financial quality, scalability, customer concentration, and market demand.

Common EBITDA Mistakes Business Owners Make

  • Confusing EBITDA with cash flow
  • Missing legitimate add-backs
  • Not normalizing rent or owner wages
  • Assuming EBITDA equals sale price
  • Relying solely on online calculators without context

EBITDA is a tool — not a conclusion.

Want a More Accurate Picture?

This calculator provides a helpful estimate, but a proper valuation considers:

  • Adjusted EBITDA
  • Industry-specific multiples
  • Market conditions
  • Buyer demand
  • Deal structure

A confidential review can help you understand what buyers would realistically pay for your business.

Request a confidential valuation or speak with a business broker to review your results.

Frequently Asked Questions

Is EBITDA the same as profit?

No. EBITDA excludes financing, taxes, and accounting adjustments to focus on operating performance.

Do buyers use EBITDA to value businesses?

Yes. EBITDA (and Adjusted EBITDA) is one of the most common valuation benchmarks in business sales.

What is a good EBITDA margin?

Margins vary widely by industry. What matters most is consistency, scalability, and adjusted earnings.

Can a business with low EBITDA still sell?

Yes. Many businesses improve valuation through normalization, add-backs, and proper positioning.