EBITDA Margin Calculator
Measure company operational efficiency by calculating EBITDA as percentage of revenue
Calculate EBITDA Margin
EBITDA ÷ Revenue Method
Earnings before interest, tax, depreciation & amortization
Total company revenue for the period
EBITDA Margin Results
Enter EBITDA and revenue data to calculate operational efficiency margin
Example: Apple Inc. EBITDA Margin (2020)
Apple Financial Data (Fiscal Year 2020)
Revenue: $274.515 billion
EBITDA: $77.344 billion
EBITDA Margin: 28.17%
Industry Performance: Above Average
Step 1: Identify Values
EBITDA: $77.344 billion
Revenue: $274.515 billion
Step 2: Apply Formula
($77.344 ÷ $274.515) × 100
= 28.17%
Step 3: Interpretation
Excellent operational efficiency
Well above industry average
Analysis: Apple's 28.17% EBITDA margin demonstrates exceptional operational efficiency, significantly outperforming the technology industry average of ~13.65%. This indicates strong pricing power, efficient operations, and effective cost management.
Margin Comparison
EBITDA Margin
Operating efficiency before D&A
Highest margin, excludes most expenses
Operating Margin
EBIT divided by revenue
Includes depreciation & amortization
Gross Margin
Gross profit divided by revenue
Only excludes cost of goods sold
Net Margin
Net income divided by revenue
Lowest margin, after all expenses
Why Use EBITDA Margin?
Pure Operations: Focuses solely on operational efficiency without financing or accounting effects
Fair Comparison: Compare companies with different capital structures and accounting methods
Cash Generation: Better proxy for cash flow generation than net income
Trend Analysis: Track operational improvements over time regardless of capital structure changes
Industry EBITDA Margin Benchmarks
Technology/Software
20-40%
High margins due to scalable business models
Pharmaceuticals
25-35%
Strong margins from patent protection
Financial Services
15-25%
Moderate margins with high volume
Retail
5-15%
Lower margins due to competitive pricing
Manufacturing
8-18%
Variable based on efficiency and automation
Energy/Oil & Gas
10-25%
Highly cyclical, commodity dependent
Real Estate
15-30%
Depends on market conditions and location
Airlines
5-15%
Low margins, high operational leverage
Note: These are general benchmarks. Always compare within specific industry segments and consider company size, geographic location, and business cycle stage.
Understanding EBITDA Margin
What is EBITDA Margin?
EBITDA margin is a method for analyzing how operationally efficient a company is. Since EBITDA does not consider interest, taxes, depreciation, and amortization, this margin is a firm representative of core operating efficiency. It is calculated by dividing EBITDA over revenues and expressed as a percentage.
EBITDA Margin Formula
EBITDA Margin = (EBITDA ÷ Revenue) × 100
Where: EBITDA = Net Income + Interest + Tax + Depreciation + Amortization
Industry Analysis
High Margin Industries
Technology, Pharmaceuticals, Software (20-40%)
Medium Margin Industries
Financial Services, Real Estate (15-25%)
Lower Margin Industries
Retail, Airlines, Manufacturing (5-15%)
EBITDA Margin Benefits:
- ✓Measures pure operational efficiency
- ✓Enables cross-company and cross-industry comparisons
- ✓Better proxy for cash generation than net income
- ✓Useful for valuation and investment analysis
Key Applications:
- •Company performance benchmarking
- •Investment screening and selection
- •Merger and acquisition analysis
- •Management performance evaluation