EBITDA MARGIN
The EBITDA margin is a ratio of Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) to revenue, expressed as a percentage: EBITDA Margin = (EBITDA / Revenue) × 100. It gauges a company’s operational profitability and serves as a valuation tool, excluding non-cash expenses like depreciation. A higher margin suggests better efficiency, but a positive EBITDA margin doesn’t guarantee overall profitability, as it omits interest and taxes. It’s useful for comparing firms within an industry, highlighting core performance without financing or accounting distortions.
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