Corporate FinanceFinancial Glossary
EBITDA Margin
Definition
EBITDA expressed as a percentage of total revenue. It measures how much of every rupee of revenue is converted into operating profit before accounting for interest, taxes, depreciation, and amortization. Calculated as (EBITDA / Revenue) x 100.
Why It Matters
EBITDA margin reveals operational efficiency independent of capital structure and tax jurisdiction. An EBITDA margin of 25% means the company retains 25 paise as operating profit from every rupee of revenue. Comparing EBITDA margins across competitors in the same sector is one of the fastest ways to identify operationally superior businesses.