EBITDA MARGIN
The EBITDA margin is a ratio of Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) to revenue, expressed as a percentage: EBITDA Margin = (EBITDA / Revenue) × 100. It gauges a company’s operational profitability and serves as a valuation tool, excluding non-cash expenses like depreciation. A higher margin suggests better efficiency, but a positive EBITDA margin doesn’t guarantee overall profitability, as it omits interest and taxes. It’s useful for comparing firms within an industry, highlighting core performance without financing or accounting distortions.
Related Terms
Face Value
Face value refers to the nominal value of a stock or bond, calculated by dividing...
Index Futures
Index futures are derivative contracts tied to an underlying index, such as Nifty Bank, Finnifty,...
Cash Conversion Cycle
The Cash Conversion Cycle (CCC) measures the days it takes a company to convert inventory...
Convertible Debentures
A convertible debenture is a long-term debt instrument that can transform into equity shares upon...
Lump Sum
A lump sum is a single, one-time payment made in full, rather than in smaller,...
Holding Company
A holding company is a parent entity that owns a stake in one or more...
