This EBITDA margin template shows you how to calculate EBITDA margin using revenue amounts and EBITDA.
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EBITDA margin is a profitability ratio that measures the earnings the company is generating before interest, taxes, depreciation, and amortization, as a percentage of revenue. EBITDA Margin = EBITDA / Revenue.
The margin does not include the impact of the company’s capital structure, non-cash expenses, and income taxes. This ratio may be used in conjunction with other leverage and profitability ratios.
To compute the EBITDA ratio, the following formula is used:
EBITDA Margin = EBITDA / Net Sales
EBITDA margin is considered to be the cash operating profit margin of a business before capital expenditures, taxes, and capital structure are taken into account. It eliminates the effects of non-cash expenses such as depreciation and amortization. Investors and owners can get a sense of how much cash is generated for every dollar of revenue earned and use the margin as a benchmark in comparing various companies.
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