How to use this EBITDA calculator

In a sale or refinancing, buyers and lenders use normalized EBITDA — not reported — to value and set covenants. If you are not yet comfortable with the concept, review the glossary entries for EBITDA and normalized EBITDA.

In Basic EBITDA you enter total revenue, cost of sales, operating expenses and depreciation/amortization. The tool gives you gross profit, EBIT, EBITDA and EBITDA margin % in real time. Use it when you have the income statement and want a clean base.

In Normalized EBITDA you start from a reported EBITDA and apply adjustment lines (owner salary above market, personal expenses, rent off market, non-recurring items, etc.). The result is the EBITDA used in a transaction for multiples and covenants; it is the mode that reflects the real work in a sale.

Why does normalized EBITDA matter in a transaction?

That number reflects the recurring profitability of the business in the hands of a standard operator, without the seller’s personal expenses or one-off items. Normalization is negotiated in due diligence; the buyer requires support for each adjustment. Understanding and preparing your normalized EBITDA is key before you sit down to negotiate.

What multiple applies to my company?

The multiple (EV/EBITDA) varies by sector, size, revenue or customer concentration and growth expectations. There is no single table: public comparables and prior transactions are reviewed. The calculator shows a range at 3×, 4×, 5× and 6× so you can see implied value under different assumptions. To go deeper on how the multiple is determined in your case, see the glossary entries for EBITDA multiple and normalized EBITDA.