Operating profitability metric.

EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) measures operating profitability before capital structure and non-cash charges distort the picture. It's used to compare businesses with different debt levels and different depreciation schedules, and is the most common base for private-company valuations (EBITDA × multiple).

10M revenue with 4M COGS, 3M operating expenses, 500k depreciation, and 100k amortization produces 3M EBITDA. EBITDA margin is 30%, which is healthy for most service businesses and excellent for manufacturing. Software businesses typically target 30-40% EBITDA margin; restaurants 10-20%.

EBITDA has critics. It excludes real costs: interest must be paid, assets do wear out, tax is real. A business with 30% EBITDA and 5% net margin is a cash-losing machine dressed up as profitable. Always pair EBITDA with free cash flow to spot the difference between operational profit and real money in the bank.

Run it with sensible defaults

Using revenue of 10,000,000, cost of goods sold of 4,000,000, operating expenses of 3,000,000, depreciation of 500,000, the calculation works out to 3,600,000.00. Nudge the inputs toward your own situation and the output recalculates instantly. The defaults are meant as a starting point, not a recommendation.

The levers in this calculation

The inputs — Revenue, Cost of Goods Sold, Operating Expenses, Depreciation, and Amortization — do not pull with equal force. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.

How the math works

Gross profit = revenue - COGS. Operating profit = gross profit - opex. EBITDA = operating profit + D + A. Margin = EBITDA ÷ revenue. The working is transparent — you can verify every step yourself in the formula section below. No black box, no opaque "proprietary model".

What the score tells you

Headline financial numbers — income, savings, debt — each tell part of the story. This calculation stitches several together into a single read you can track over time. The value is in the direction, not the absolute number.

What this doesn't capture

The score is a composite of the inputs you provide. Life context — job security, family obligations, health, housing — doesn't appear in the math but shapes the real picture. Use the number as a prompt, not a verdict.