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EBITDA, Adjusted EBITDA & SDE Calculator

Calculate EBITDA two ways, reconcile owner adjustments and use your own valuation multiples.

BusinessUpdated November 2, 2026
Tables verified Nov 2, 2026

Your Inputs

USD · annual
Calculation method

Use annual figures from the same reporting period.

Start with
050,000,000
-5,000,0005,000,000
0500,000
-1,500,0001,500,000
0500,000
0300,000
Adjustments, target & valuationOptional
Owner and normalization adjustments

Only enter supportable items from the same period. One-time income reduces adjusted earnings.

05,000,000
05,000,000
05,000,000
01,000,000
01,000,000
Your target and valuation assumptions

No industry multiple or valuation range is supplied. Enter your own assumptions.

1100
020
020
050,000,000
050,000,000
EBITDA · unadjustedlive

$453,000

Net-income path · 18.9% margin on $2.4M revenue

Compositionthree distinct measures
  • EBITDA$453,000
  • Adjusted EBITDA$551,000
  • SDE$646,000

Bars compare absolute amounts on one scale; the printed sign shows a loss. These are three distinct measures, not parts to add together.

Breakdown
Adjusted EBITDA$551,000
Seller's Discretionary Earnings$646,000
EBITDA margin18.9%
EBITDA enterprise valueEnter your multiple
Equity: EBITDA EV − debt + cashEnter your multiple
SDE-implied business valueEnter your multiple
Assessment
010094TARGET MARGIN PROGRESS

18.9% actual ÷ 20% personal target, capped at 100. Not an industry rating.

EBITDA margin

18.9%

Unadjusted EBITDA ÷ revenue

Adjusted EBITDA margin

23.0%

After eligible and owner-role adjustments

SDE margin

26.9%

Owner-inclusive SDE ÷ revenue

Earnings reconciliation

Net income$310,000
+ Interest expense$24,000
+ Income tax expense or benefit (signed)$78,000
+ Depreciation$32,000
+ Amortization$9,000
EBITDA · unadjusted$453,000
+ Non-recurring expenses$28,000
+ Other eligible expense adjustments$0
− Non-recurring income-$0
Adjusted EBITDA before owner-role normalization$481,000
+ One working owner's compensation$165,000
Seller's Discretionary Earnings (SDE)$646,000
− Market replacement manager cost-$95,000
Adjusted EBITDA$551,000

SDE includes the working owner’s compensation. Adjusted EBITDA instead deducts the market cost of replacing that owner’s role. Keep both measures separate.

Explicit valuation illustrations

Positive earnings and your own multiple are required. No industry preset, derived SDE multiple or arbitrary high/low range is used.

EBITDA × 0.0×Enter your multiple
Adjusted EBITDA × 0.0×Enter your multiple
SDE × 0.0×Enter your multiple
EBITDA EV − $0 debt + $0 cashEnter your multiple
Adjusted EBITDA EV − debt + cashEnter your multiple

Defend every adjustment

Keep invoices, contracts and a written explanation for each line. Routine costs are not one-time add-backs, and non-recurring income must be removed as well.

EBITDA is not cash flow

EBITDA, Adjusted EBITDA and SDE are non-GAAP measures. They do not deduct capital expenditures, working-capital needs or debt service, and this illustration is not a professional valuation.

Saved scenarios

No saved scenarios yet

Save up to three configurations from the results panel and Swiftly will line them up side by side, flagging the best value automatically.

What this calculator does

Calculate unadjusted EBITDA from net income or revenue, then reconcile Adjusted EBITDA and Seller’s Discretionary Earnings without mixing their owner-compensation rules. Add your own multiples for a transparent valuation illustration.

Figures this model assumes

Sources & method →
  • 01Example EBITDA: $453,000
  • 02Example SDE: $646,000
  • 03Example Adjusted EBITDA: $551,000
  • 04Example EBITDA margin: 18.9%

The complete guide

EBITDA, Adjusted EBITDA and SDE

Updated November 2, 2026

01Two ways to calculate EBITDA

From net income, EBITDA equals net income plus interest expense, income tax expense, depreciation and amortization. Enter a tax benefit as a negative tax expense so the bridge remains mathematically correct. Keep every input in the same annual reporting period.

From revenue, subtract operating costs that exclude depreciation, amortization, interest and income taxes. Those excluded items must not already be inside the operating-cost input. The calculator uses your selected path and shows the full reconciliation below the result.

Worked example: $310,000 net income + $24,000 interest + $78,000 tax expense + $32,000 depreciation + $9,000 amortization = $453,000 EBITDA.

02Keep Adjusted EBITDA and SDE separate

Start with unadjusted EBITDA, add documented non-recurring expenses and other eligible expense adjustments, and subtract non-recurring income. Removing only unusual costs while keeping unusual gains would overstate sustainable earnings.

Seller’s Discretionary Earnings then adds one working owner’s compensation. Adjusted EBITDA instead deducts the market cost of replacing that owner’s operating role. With $453,000 EBITDA, $28,000 of non-recurring expenses and $165,000 of owner compensation, SDE is $646,000. Deducting a $95,000 replacement manager cost produces $551,000 of Adjusted EBITDA.

  • EBITDA is shown before the optional normalization adjustments.
  • SDE is owner-inclusive and is not the same as Adjusted EBITDA.
  • If no working-owner role needs normalizing, review whether both owner inputs should be zero.

03What makes an adjustment defensible

A non-recurring expense should be unusual, supported by records and genuinely not expected to continue. Routine payroll, ordinary rent and recurring marketing do not become add-backs simply because a buyer might prefer lower expenses. Personal or discretionary items also need a clear business-purpose and ownership review.

Normalize both sides of the income statement. A one-time legal cost may be an expense adjustment, while a one-time settlement gain or contract windfall is income to deduct. Keep receipts, contracts, tax returns and a short explanation for every line because a buyer can reject unsupported adjustments during diligence.

04Multiples, enterprise value and equity value

An EBITDA multiple illustrates enterprise value when it is applied to positive EBITDA or Adjusted EBITDA. The tool uses only the multiple you enter and does not choose an industry multiple for you. SDE uses its own separately entered multiple; it is never derived by multiplying the EBITDA multiple by a fixed factor.

For the EBITDA-based illustrations, implied equity value equals enterprise value minus debt plus cash. This simple bridge does not capture every deal adjustment, working-capital peg, tax, transaction cost or asset included in a sale. If the selected earnings measure is zero or negative, the calculator does not multiply the loss into a negative valuation.

There is no universal industry multiple. Size, growth, concentration, recurring revenue, management depth, assets and transferability all affect a real transaction.

05Why EBITDA is not cash flow

EBITDA excludes interest, taxes, depreciation and amortization, but that does not make those items economically irrelevant. It also leaves out capital expenditures and working-capital needs. A company can report positive EBITDA while consuming cash or being unable to service its debt.

EBIT includes depreciation and amortization, while EBITDA excludes them. Operating cash flow includes working-capital movements, and free cash flow also accounts for capital expenditures. Review those measures alongside EBITDA rather than treating one metric as a complete answer.

06Non-GAAP and valuation limitations

EBITDA, Adjusted EBITDA and SDE are non-GAAP measures with definitions that can vary by company or transaction. SEC registrants have specific Regulation G presentation and reconciliation obligations; this general calculator does not determine those disclosure requirements.

Use a consistent multi-year period review and investigate unusual swings before relying on a run-rate figure. The result is an arithmetic illustration, not a fairness opinion, quality score, financing commitment or professional business valuation.

Frequently asked

EBITDA Calculator FAQ

12 answers

Add interest expense, income tax expense, depreciation and amortization to net income. For example, $310,000 + $24,000 + $78,000 + $32,000 + $9,000 equals $453,000. Enter a tax benefit as a negative tax expense.

Subtract operating costs that exclude depreciation, amortization, interest and income taxes from revenue. Do not put those excluded expenses back into the operating-cost input or you will understate EBITDA.

Both start with EBITDA and eligible normalization adjustments. SDE adds one working owner’s compensation. Adjusted EBITDA instead deducts the market cost of replacing that owner’s operating role after SDE is calculated.

Not as a stand-alone rule. The owner’s compensation is added to SDE, then the market replacement manager cost is deducted to reach Adjusted EBITDA. The net owner-role adjustment is owner compensation minus replacement cost.

No. Non-recurring income is subtracted when normalizing earnings, while eligible non-recurring expenses are added. This prevents a one-time gain from inflating the adjusted result.

Yes. Negative EBITDA can indicate that operating costs exceed revenue after the selected reconciliation. The calculator preserves that loss but does not multiply negative earnings into a negative business valuation.

There is no universal good margin because business models, accounting policies and capital needs differ. The dial shows progress toward the personal target you enter, capped at 100; it is not an industry benchmark or earnings-quality grade.

No. EBITDA does not deduct capital expenditures, working-capital needs, interest, taxes or debt service. Review operating cash flow, free cash flow and the debt schedule alongside it.

Use a multiple supported by your own comparable-transaction or professional valuation research. Swiftly does not supply a universal industry preset, derive the SDE multiple from the EBITDA multiple or create an arbitrary valuation range.

EBIT includes depreciation and amortization; EBITDA excludes them. Both require careful treatment of non-operating and unusual items, so use the reconciliation rather than assuming every published definition is identical.

For the EBITDA-based illustrations, equity value equals enterprise value minus debt plus cash. The SDE illustration is kept separate as SDE multiplied by your SDE assumption. Real deals can require additional working-capital, tax and transaction adjustments.

No. EBITDA, Adjusted EBITDA and SDE are non-GAAP measures, and adjustment practices vary. Public registrants may have Regulation G reconciliation and presentation obligations that are outside this calculator’s scope.

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Swiftly calculations are educational estimates generated from published 2026 tax brackets, Federal Reserve rate data and state-level averages. They are not an offer of credit, tax advice or a guarantee of terms. Confirm results with a licensed lender, CPA or advisor before making financial decisions.