EBITDA margin is an assessment of a company’s operating profitability as a percentage of its total revenue. It is equal to earnings before interest, tax, depreciation as well amortization, which we call (EBITDA) divided by total revenue. EBITDA margin provides an investor or business owner with a clear view of a company's operating profitability and cash flow.
Formula
EBITDA Margin = EBITDA / Total Revenue
Example
A company has revenue of $125,000 and EBITDA of $15,000.
According to the above formula, EBITDA margin is:-