EBITDA margin is a profitability ratio that measures a company's earnings before interest, tax, depreciation and amortization (EBITDA) as a percentage of its total revenue. It gives investors and analysts an understanding of the operational profitability of a company by showing earnings derived from its core business operations.The key difference between the EBITDA margin and operating margin is that the former eliminates the impact of depreciation and amortization. This distinction can be important, especially in industries with large amounts of fixed assets or intangible assets which can incur significant depreciation or amortization expenses.
Learn EBITDA Margin with interactive examples and practice exercises in our Performance Metrics module.
This interactive learning module helps you understand EBITDA Margin through hands-on practice and real-world examples.