How to Easily Calculate EBITDA in Excel (Examples)

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization.

It is calculated by adding back the interest expense, the taxes, and the wear and tear expenses for assets of a Company to its net profit 🧾

It is an important analytical metric that helps compare companies and their performance over a given period. It is simple to calculate and brings you a clear picture of how a Company is doing.

To learn how to calculate EBITDA in Microsoft Excel, read this guide until the end and practice along with me by downloading the free practice workbook for this tutorial.

What is EBITDA

As the acronym says, EBITDA shows you the earnings of a business before interest, taxes, depreciation, and amortization.

It is a non-GAAP earning measure of a Company that focuses on the operational performance of a Company by setting aside the non-operational expenses.

EBITDA = Earnings + Interest + Taxes + Depreciation + Amortization

What are all these components? 👇

  • Earnings: Net Profit / Loss of a Company
  • Interest: The interest expense borne by the Company on its loans / borrowed capital
  • Taxes: The taxes imposed on the Company by the government (usually a percentage of its taxable profits)
  • Depreciation: The annual wear and tear of a Company’s tangible assets
  • Amortization: The annual wear and tear of a Company’s intangible assets

Adding all these components back to the net profit of a company, we get the earnings before interest, taxes, depreciation, and amortization.

Pro Tip!

While the rest of the components are common terms, you might not have heard of Depreciation and Amortization (unless you’re from an accounts background).

Depreciation and Amortization refer to the periodic allocation of the cost of a business’s capital assets. For example, a business buys a manufacturing plant for $10,000. It expects the useful life of the plant (before it wears off) to be 10 years 🏭

This means after 10 years the plant would become inoperable/obsolete and would need to be changed. But before that, the business would use it to generate total revenue for a good 10 years.

Hence the 1/10th cost of the machine is booked as an expense each year for 10 years. By the 10th year, as the Company replaces the machine, the entire cost of the machine would have gone from assets to expenses.

The expense booked each year is what we call Depreciation / Amortization 💡

Depreciation is booked on tangible assets (machinery, buildings, equipment, etc.). Whereas Amortization is booked on intangible assets (Licenses, copyrights, software, etc.)

Why is EBITDA used

EBITDA offers a snapshot into a Company’s operational performance. It focuses on the core profitability of the Company derived from its core operations.

It provides a measure of the earnings of a company leaving out the expenses that do not represent the results of a Company’s core operations 💪

EBITDA excludes:

  • The non-cash expenses like depreciation and amortization as these expenses represent the decrease in the value of assets and are non-cash expenses (nothing goes out from a Company’s cash; it is just the allocation of an asset’s cost) 💰
  • Interest expense varies on a Company’s financing structure. A company that is highly geared will have a higher interest expense. Whereas, a Company with less gearing will have a lesser interest expense. Some companies might be entirely equity financed with zero debt – they will have zero interest expense 🏦

However, the revenue generated by both companies depends on how well they perform, how many customers they win and maintain, etc. The finance structure of a Company doesn’t affect its revenues; hence the related expenses are not accounted for.

  • Tax expense borne by a Company depends on a country’s legislation. Some countries are tax-free whereas others might charge a 40% tax on a Company’s profits. The imposition of tax on a Company by the government is not a result of its operations 🗽

As EBITDA removes the effect of financing structures, tax environments, and non-cash expenses all of which can greatly vary and are not a direct consequence of a Company’s operations, EBITDA allows an easier and better comparison of a Company’s performance with other companies from the same industry.

How to calculate EBITDA in Excel

Calculating EBITDA in Excel is all about identifying the right components and adding them up.

Here I have an income statement in Excel.

Income statement template

To calculate the EBITDA for this Company:

Step 1) Pick out the net profit of this company.

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profit / enterprise value

Step 2) Add the interest expense to it.

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Adding interest shortcut

I have deducted B14 from B16 since the interest expense appears as a negative number in the income statement. A minus and a minus make a plus.

Kasper Langmann, co-founder of Spreadsheeto

Step 3) Add the tax expense to it.

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EBIT valuation of company

You will find the interest and the tax expense in the income statement after the Operating Profit and just before the Net Profit.

Kasper Langmann, co-founder of Spreadsheeto

Step 4) Add the depreciation expense to it.

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Adding depreciation expense

Step 5) Add the amortization expense to it.

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Amortization Expense

Depreciation and Amortization expenses are mostly included in the Operating Expenses, and you will find them before the Operating Income. However, be careful, sometimes, these might also be included in the Cost of Goods Sold (COGS) if the depreciation relates to an asset that is directly used to manufacture goods.

Kasper Langmann, co-founder of Spreadsheeto

Step 6) Hit Enter to have the EBITDA of Company ABC calculated.

EBITDA of Company ABC

That’s it – calculating EBITDA in Excel will not prove challenging if you can rightly spot the figures out of an income statement. The rest is all about adding them up 🧐

In addition to EBITDA itself, the EBITDA margin and EBITDA multiple are also excellent corporate finance ratios used by financial analysts for comparison and financial analysis of a Company.

Kasper Langmann, co-founder of Spreadsheeto

Calculating EBITDA of Real-Life Companies

After we have seen an example of how to calculate EBITDA, how about we calculate it for a real-life company?

Here I have a screenshot of the Consolidated Income Statement of Qantas Airways for the year ended 2022 ✈

Consolidated Income statement of QA

Image Source: Qantas Annual Report 2022

Pro Tip!

You’ll see two columns of numbers in the Income Statement. The left column represents the numbers for the year 2022 whereas the one on the left represents 2021’s. We call this the comparative information. It helps users see how the numbers have changed over the years at a glance.

Since we are calculating the EBITDA for 2022, you may ignore the numbers for 2021.

Let’s try and see if we can calculate the EBITDA for it.

Step 1) Look out for the net profit / (loss) after tax of the Company for the year ended 2022.

Net income cashflow

There it is – A loss of USD 860 million. The company has not made profit but a loss of $860 million during the year 2022.

Let’s insert it in Excel as follows.

Company’s earnings before interest and taxes / dep

Step 2) Look out for the net interest/finance expense of the company.

Net finance cost

The net finance cost is $301 million. Input it in Excel.

Finance cost in Excel

Step 3) Find out the tax expense/income for the year.

tax rate

Since the company is loss-making, instead of tax expense, it has a tax benefit of $331 million which is fine. We will pick it out and insert it in Excel.

Income Tax expense in Excel

Step 4) Lastly, look out for the depreciation and amortization expense of the Company.

Depreciation and Amortization Expense

The Depreciation & Amortization Expense is $1801 million. There it goes in Excel.

Capital Expenditures added back

Pro Tip!

In these financials, the depreciation and amortization expense appear as a separate line item on the face of the income statement, and we identified it.

However, in many financial statements, it will be clubbed within the operating expenses. You can find it out by referring to the note for operating expenses.

Step 5) Add back all the expenses in Excel.

EBITDA calculation

Step 6) Add them to the net profit / (loss) of the Company as follows.

Since the expenses appear as a negative number, I will deduct them from the earnings of the company because two negative signs make a positive ➕

Company’s EBITDA formula

This calculates the EBITDA of Qantas Airways for the year 2022.

Pro Tip!

The EBITDA for Qantas Airways for the year 2022 comes out as $911 million. Must note that the loss of $860 million changes into a profit of $911 when we remove the non-operating and non-cash expenses from it.

Just from an analytical point of view, the shift in numbers is justified as the Company had only booked depreciation and amortization expenses of $1801 million. Makes sense since the airline industry is a capital-intensive industry so there are more capital assets and a higher depreciation expense 🤔

However, this shows how important it is to focus on the profitability of a Company putting aside the non-operational expenses. The picture might change in big time – from loss to profit.


EBITDA is an excellent financial modeling technique used to compare the financial performance of a Company with other companies in the same industry 🎯

Since it only focuses on the operational results of the Company, it facilitates a fairer comparison and helps derive better results. However, one of the major drawbacks of the EBITDA is that it ignores the effect of the capital structure of the entity.

Other financial metrics that can be used to evaluate the performance of a Company include the Profit Margin and Return on Investment (ROI). Learn how to calculate them in Excel by reading my Excel tutorials on them.