EBITDAmargin
EBITDA margin is a financial metric that expresses a company’s earnings before interest, taxes, depreciation, and amortization as a percentage of its revenue. It provides a view of operating profitability by removing non-operating and non-cash accounting items, focusing on the core business performance.
Calculation is straightforward: EBITDA margin equals EBITDA divided by total revenue, multiplied by 100 to yield
The metric is widely used to compare the operating efficiency of different firms, especially within industries
Limitations include its non-GAAP nature and the lack of a standardized definition, which can hinder comparability.
Example: with revenue of 500 million and EBITDA of 150 million, EBITDA margin is 30%.