Many companies understand EBITDA purely as an accounting figure, but if you already know it’s more than that, the next step is understanding what it’s really saying about your business: whether it is high quality, what multiple it deserves, and how daily operational decisions directly impact your company’s value in the eyes of investors and buyers. So… how can you properly calculate a company’s value using EBITDA?
In this article, we explain what EBITDA is, how it is calculated, how to interpret whether it is good or bad, and how it directly impacts company valuation.
We’ll also explore why factors such as logistics and returns can have a major impact on the profitability of an ecommerce business, and which metrics investors and funds typically analyze when evaluating these types of companies.
EBITDA answers a very specific question: how much money is the business really generating from its operating activity, without accounting or financial distortions?
EBITDA = Revenue – Operating expenses
Or, in a more detailed way:
EBITDA = Net profit + interest + taxes + amortization + depreciation
Although both formulas technically lead to the same result, in startups it is often far more useful to analyze EBITDA from the operational logic of the business.
Why EBITDA does not reflect cash
A company can have positive EBITDA and still face serious cash flow problems. Inventory, supplier payment terms, and customer acquisition investments can put significant pressure on liquidity. EBITDA should always be analyzed alongside cash flow, burn rate, and runway.
How EBITDA is calculated
| Concept | € / year | % of sales | Impact |
|---|---|---|---|
| Revenue | |||
| Gross revenue | 2.000.000 € | 100,0% | — |
| Operating costs | |||
| Cost of goods sold (COGS) | −900.000 € | 45,0% | High |
| Logistics and fulfillment | −250.000 € | 12,5% | Critical |
| Marketing and acquisition | −400.000 € | 20,0% | High |
| Team | −300.000 € | 15,0% | Medium |
| Other operating costs | −100.000 € | 5,0% | Low |
| EBITDA | 50.000 € | 2,5% | ⚠ Adjusted |
The business generates €2M in revenue, but its real operating capacity to generate profitability is only €50,000 (a 2.5% EBITDA margin). Logistics and marketing alone consume 32.5% of total sales. Any operational deterioration would push EBITDA into negative territory.
How to calculate a company’s value using EBITDA
The most common method used in M&A and fundraising rounds is applying a multiple to EBITDA. The logic is simple: if an investor understands how much operating profit the business generates, they can estimate how much the company is worth.
EBITDA = Revenue – Operating expenses
The multiple varies depending on the sector, risk, growth, and overall quality of the EBITDA.
The challenge is that two companies with the same EBITDA can receive completely different valuations. The multiple is not fixed — it is determined by the quality of the business.
Benchmark multiples by business type
Following the previous example: that ecommerce business with €50,000 EBITDA and a 4× multiple would be valued at €200,000. If it optimizes operations and increases EBITDA to €200,000 — while maintaining the same revenue level — the valuation jumps to €800,000. The real lever is in the margins, not in revenue growth.
How logistics and returns affect ecommerce EBITDA
Logistics impact
The problem is not the cost itself — it’s that it grows faster than revenue.
- Higher shipping volumes → lower margin per unit
- More incidents → more customer support and reshipments
- Growing storage needs → fixed costs that keep increasing
- Last-mile delivery → one of the hardest costs to control
Returns impact
| Cost category | Typical estimate | Visible in P&L | EBITDA impact |
|---|---|---|---|
| Reverse logistics (collection) | 4€ – 9€ | Yes | Direct |
| Reconditioning / inspection | 2€ – 6€ | Partial | Direct |
| Additional customer support | 1€ – 4€ | No (hidden) | Indirect |
| Loss of product margin | Variable | Partial | Direct |
| Financial cost of cash flow pressure | Variable | No (hidden) | Indirect |
| Total estimated cost per return | 7€ – 19€+ | — | Severe |
In fashion and lifestyle ecommerce, the impact is even greater: return rates in these sectors can exceed 25–35%, with an average order value of €60 and a return cost of around €12 per order.
When is EBITDA good or bad?
There is no universal definition of a “good” EBITDA. Its interpretation depends entirely on the company’s stage, sector, and business model. What matters is not the isolated number itself, but whether there is a clear logic behind it and a credible path toward sustainability.
- In early-stage startups, operating with negative EBITDA is relatively common while prioritizing growth. The issue is not the negative sign itself, but whether burn rate increases uncontrollably or there is no clear path toward profitability.
- In growth-stage companies, reaching operational break-even starts becoming more important. In SaaS businesses, negative EBITDA may still be tolerated thanks to recurring revenue models, but in ecommerce, pressure on profitability usually appears much earlier due to the impact of logistics, returns, and customer acquisition costs.
- In more mature or scale-stage companies, positive EBITDA is typically necessary to continue growing without constantly relying on new fundraising rounds.
How is your company interpreting EBITDA?
If any of these scenarios sound familiar, there is likely financial work to be done:
🔴We are growing but EBITDA is not improving:
The operating structure is not scaling efficiently. The model needs to be reviewed.
🟡We have positive EBITDA but cash flow is tight:
There is likely a working capital issue or poor cash collection and payment management.
🔴We don’t know which multiple we deserve:
Without a solid financial model, it is impossible to prepare a fundraising round with a coherent narrative.
🟡Returns are not properly quantified in the P&L:
An invisible cost that investors will identify before you do during due diligence.
How we can help you at The Startup CFO
At The Startup CFO, we work with startups and ecommerce companies that need to truly understand how profitability is built and how it impacts growth and valuation.
We help companies build solid financial models, correctly interpret metrics such as EBITDA, optimize margins, improve financial reporting, and prepare fundraising rounds with a financial narrative aligned with investor expectations.
Understanding EBITDA is only the beginning. What really matters is understanding what it reveals about your company’s profitability, operational efficiency, and ability to scale sustainably while creating long-term value.
📞 Schedule a call with us and start structuring your finances in the most effective way possible.
