Profitability
EBITDA margin
EBITDA as a share of revenue, which allows comparison across differently sized businesses.
The Formula
margin = EBITDA / revenue
EBITDA as a share of revenue, which allows comparison across differently sized businesses.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| m | EBITDA margin | ratio | EBITDA as a share of revenue. |
| EBITDA | EBITDA | currency | Earnings before the four add-backs. |
| R | Revenue | currency | Total sales for the same period. |
What Each Symbol Means
mratio
EBITDA margin
EBITDA as a share of revenue.
EBITDAcurrency
EBITDA
Earnings before the four add-backs.
Rcurrency
Revenue
Total sales for the same period.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate ebitda page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate EBITDA, filed under Business. Every number the guide produces comes from substituting into this one line.