EBITDA Margin Calculator

Analyze your company's profitability with ease

Calculate your EBITDA margin by entering your company's revenue and EBITDA, or use the detailed breakdown for automatic calculation. Understand your business's operating profitability in seconds.

Examples

See how EBITDA margin is calculated in real scenarios.

Simple EBITDA Margin

Basic

A company with $1,000,000 revenue and $250,000 EBITDA.

Total Revenue: 1000000 $1,000,000.00

EBITDA: 250000 $250,000.00

EBITDA from Net Income Breakdown

Detailed

Calculate EBITDA margin using net income and all breakdowns.

Total Revenue: 2000000 $2,000,000.00

Net Income: 300000 $300,000.00

Interest Expense: 40000 $40,000.00

Taxes: 60000 $60,000.00

Depreciation: 50000 $50,000.00

Amortization: 20000 $20,000.00

International Example (EUR)

International

A European company with €750,000 revenue and €120,000 EBITDA.

Total Revenue: 750000 $750,000.00

EBITDA: 120000 $120,000.00

Zero EBITDA

Zero EBITDA

A company with $500,000 revenue and $0 EBITDA.

Total Revenue: 500000 $500,000.00

Net Income: 0 $0.00

Interest Expense: 0 $0.00

Taxes: 0 $0.00

Depreciation: 0 $0.00

Amortization: 0 $0.00

Other Titles
Understanding EBITDA Margin: A Comprehensive Guide
Master the concept, calculation, and application of EBITDA margin.

What is EBITDA Margin?

  • Definition and Importance
  • EBITDA vs. Other Profitability Ratios
  • Why Investors Use EBITDA Margin
EBITDA margin is a key financial metric that measures a company's operating profitability as a percentage of its total revenue. It is widely used by investors and analysts to compare profitability between companies and industries.
EBITDA Margin Formula
EBITDA Margin = (EBITDA / Revenue) × 100

EBITDA Margin in Practice

  • A company with $1,000,000 revenue and $250,000 EBITDA has a margin of 25%.
  • If EBITDA is $0, the margin is 0%.

Step-by-Step Guide to Using the EBITDA Margin Calculator

  • Input Required Data
  • Choose Calculation Method
  • Interpret the Results
To use the calculator, enter your company's total revenue and EBITDA. Alternatively, use the breakdown fields to calculate EBITDA automatically.
Calculation Methods
You can enter EBITDA directly or calculate it from net income, interest, taxes, depreciation, and amortization.

Calculation Examples

  • Direct input: Revenue $2,000,000, EBITDA $400,000.
  • Breakdown: Net Income $300,000 + Interest $40,000 + Taxes $60,000 + Depreciation $50,000 + Amortization $20,000 = EBITDA $470,000.

Real-World Applications of EBITDA Margin

  • Business Valuation
  • Performance Benchmarking
  • Credit Analysis
EBITDA margin is used in business valuation, comparing company performance, and assessing creditworthiness. It helps identify operational efficiency and profitability trends.
Industry Comparisons
Different industries have different average EBITDA margins. Comparing your margin to industry peers provides valuable insights.

Applications in Business

  • Tech companies may have higher EBITDA margins than retail.
  • Banks and lenders use EBITDA margin in loan decisions.

Common Misconceptions and Correct Methods

  • EBITDA is Not Cash Flow
  • Margin Interpretation
  • Limitations of EBITDA Margin
EBITDA margin is not the same as cash flow margin. It excludes capital expenditures and changes in working capital.
Correct Use of EBITDA Margin
Always use EBITDA margin alongside other financial metrics for a complete analysis.

Misconceptions

  • A high EBITDA margin does not guarantee high cash flow.
  • Negative EBITDA margin indicates operational issues.

Mathematical Derivation and Examples

  • Formula Breakdown
  • Worked Examples
  • Interpreting Results
The EBITDA margin formula is derived by dividing EBITDA by total revenue and multiplying by 100 for percentage.
Example Calculation
If revenue is $1,000,000 and EBITDA is $250,000: EBITDA Margin = (250,000 / 1,000,000) × 100 = 25%.

Mathematical Examples

  • Revenue $750,000, EBITDA $120,000: Margin = 16%.
  • Revenue $500,000, EBITDA $0: Margin = 0%.