EBITDA Margin Calculator
Operating profit per pound of revenue.
Calculate EBITDA margin from EBITDA and revenue to measure operating profitability. Instant results from your inputs, with the methodology visible.
What this tool does
This tool calculates EBITDA margin from EBITDA and revenue.
Enter Values
Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
EBITDA margin divides EBITDA by revenue, expressed as a percentage. It's the cleanest cross-industry measure of operating profitability - strips out capital structure (interest), tax differences, and depreciation policies. Software businesses target 30-40%+ EBITDA margin; manufacturers 10-20%; restaurants 8-15%.
3M EBITDA on 10M revenue = 30% EBITDA margin. Strong performance for most service and software businesses. Each 1 of revenue delivers 0.30 of operating cash generation, leaving opex at 0.70. Raising revenue without expanding headcount proportionally is the fastest path to higher EBITDA margin.
EBITDA margin trends matter more than absolute level. A business growing revenue 30% while EBITDA margin stays at 25% is creating real value. A business with 40% EBITDA margin declining to 35% is showing margin pressure - usually rising costs, competitive pricing, or scaling inefficiency. Year-over-year direction is the real signal.
Quick example
With ebitda of 3,000,000 and revenue of 10,000,000, the result is 30.00%. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.
Which inputs matter most
You enter EBITDA and Revenue. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.
What's happening under the hood
EBITDA margin = EBITDA ÷ revenue × 100. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.
Using this as a check-in
Re-run this every three months. A single reading tells you where you stand; four readings tell you whether things are improving. The trend matters more than any individual snapshot.
What this doesn't capture
The score is a composite of the inputs you provide. Life context — job security, family obligations, health, housing — doesn't appear in the math but shapes the real picture. Use the number as a prompt, not a verdict.
£3,000,000 £ EBITDA ÷ £10,000,000 £ revenue = 30.00%.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
EBITDA margin = EBITDA ÷ revenue × 100.
Frequently Asked Questions
What's a good EBITDA margin?
Why is my margin declining?
Can EBITDA margin exceed gross margin?
Is EBITDA margin a good valuation metric?
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