Business tools
EBITDA Margin Calculator
Calculate EBITDA and EBITDA Margin from revenue, COGS, operating expenses, depreciation and amortization to measure operating profitability.
Estimate standard EBITDA and EBITDA Margin from same-period financial figures. Enter Depreciation and Amortization only when they are included in Operating Expenses; the Tool adds those figures back. Calculations run locally in your browser; inputs are not saved.
Enter Revenue, COGS, Operating Expenses and included Depreciation and Amortization for the same period.
Compare EBITDA with Operating Margin and Gross Margin, and remember EBITDA is not cash flow. Use the Operating Margin Calculator, Gross Margin Calculator and Cash Flow Calculator.
EBITDA Margin Example
Revenue: $1,000,000. COGS: $600,000. Gross Profit: $400,000. Operating Expenses: $280,000, including $20,000 depreciation and $10,000 amortization. Operating Income = $1,000,000 − $600,000 − $280,000 = $120,000. EBITDA = $120,000 + $20,000 + $10,000 = $150,000. EBITDA Margin = $150,000 ÷ $1,000,000 × 100 = 15.0%. The business generates approximately $0.15 of EBITDA per $1.00 of Revenue before interest, income taxes, depreciation and amortization. The dollar sign is illustrative; no currency is selected or converted.
About this calculator
What Is EBITDA?
EBITDA means Earnings Before Interest, Taxes, Depreciation and Amortization. It is an accounting performance measure commonly used to compare earnings before financing, income taxes and non-cash depreciation and amortization expenses. EBITDA is not cash generated by the business and is not the same as cash flow.
EBITDA Formula
EBITDA = Operating Income + Depreciation + Amortization. Operating Income = Revenue − COGS − Operating Expenses. For this calculation, the D&A amounts entered as add-backs must already be included in Operating Expenses.
EBITDA Margin Formula
EBITDA Margin = EBITDA ÷ Revenue × 100. Percentage margins are unavailable when Revenue is zero.
What Does EBITDA Margin Measure?
EBITDA Margin expresses EBITDA as a share of Revenue. It describes earnings before interest, income taxes, depreciation and amortization under the classifications entered; it is not a cash-flow margin.
Can EBITDA Be Negative?
Yes. EBITDA and EBITDA Margin can be negative when the entered operating results remain below zero after D&A add-backs. This calculation does not diagnose the cause or establish insolvency.
What Does a High EBITDA Margin Mean?
A higher EBITDA Margin generally means more EBITDA is generated per dollar of Revenue. Pricing, Gross Margin, cost structure, operating efficiency, scale and business model may contribute. It is not automatically better; consider the wider business context.
What Does a Low EBITDA Margin Mean?
A lower EBITDA Margin may reflect lower Gross Margin, higher operating costs, growth investment, business-model differences, pricing pressure or temporary expenses. It is not automatically poor; this Tool does not diagnose the cause.
Operating Expenses and D&A Add-Backs
Include depreciation and amortization in Operating Expenses when they are part of those costs, then enter those same amounts below as add-backs. Their combined amount cannot exceed Operating Expenses. Do not include interest, income taxes or COGS as Operating Expenses.
EBITDA Margin vs. Operating Margin
Operating Margin = Operating Income ÷ Revenue. EBITDA Margin = EBITDA ÷ Revenue. EBITDA adds back depreciation and amortization when those costs are included in Operating Expenses, so its margin is generally at least as high as Operating Margin when D&A is positive. See the live Operating Margin Calculator for the related measure.
EBITDA vs. Operating Income
Operating Income includes D&A when those costs are included in Operating Expenses. EBITDA adds them back: $120,000 Operating Income + $30,000 D&A = $150,000 EBITDA. Operating Income and EBIT may differ depending on accounting presentation and non-operating items.
EBITDA vs. Net Income
EBITDA excludes interest, income taxes, depreciation and amortization. Net Income includes the effects of those items plus applicable non-operating items. This Tool does not calculate Net Income or Net Profit Margin.
EBITDA Margin vs. Gross Margin
Gross Margin reflects Revenue after COGS but before Operating Expenses. EBITDA Margin also reflects Operating Expenses, with included D&A added back. The live Gross Margin Calculator measures the gross result separately.
Is EBITDA the Same as Cash Flow?
No. EBITDA does not account for capital expenditures, changes in working capital, principal repayments, cash taxes or interest payments. It should not be treated as operating cash flow or free cash flow. Compare this accounting measure with the live Cash Flow Calculator where appropriate.
What Is Adjusted EBITDA?
Some companies and lenders calculate Adjusted EBITDA by adding back selected non-recurring or other expenses. Definitions vary. This Tool calculates standard EBITDA from the entered financial figures and does not model discretionary add-backs.
EBITDA Margin and Financial Health
EBITDA Margin should not be used alone to assess financial health. Broader analysis may consider Gross Margin, Operating Margin, Net Profit Margin, ROA, ROE, cash flow, leverage and liquidity. Margins vary by industry, capital intensity, business model, company maturity, pricing, scale and cost structure; there is no universal benchmark.
Frequently asked questions
What does EBITDA stand for?
EBITDA stands for Earnings Before Interest, Taxes, Depreciation and Amortization.
How do you calculate EBITDA?
Add depreciation and amortization to Operating Income. In this Tool, Operating Income is Revenue minus COGS and Operating Expenses.
How do you calculate EBITDA Margin?
Divide EBITDA by Revenue and multiply by 100. The margin is unavailable when Revenue is zero.
Is EBITDA the same as Operating Income?
No. EBITDA adds depreciation and amortization back to Operating Income when those items are included in Operating Expenses.
Is EBITDA the same as cash flow?
No. EBITDA does not account for capital spending, working-capital changes, debt principal, cash taxes or interest payments.
What is a good EBITDA Margin?
There is no universal threshold. EBITDA Margins differ by industry, capital intensity, business model, maturity, pricing, scale and cost structure.
Is a higher EBITDA Margin always better?
Not automatically. Consider business context, investment, cost structure, accounting definitions and other financial measures.
Can EBITDA be negative?
Yes. Negative EBITDA means the entered operating results remain negative after the D&A add-backs. This does not diagnose the cause or establish insolvency.
Why are depreciation and amortization added back?
Standard EBITDA is measured before those expenses. Enter them as add-backs only if they are included in the Operating Expenses figure above.
What is the difference between EBITDA Margin and Operating Margin?
Operating Margin uses Operating Income. EBITDA Margin uses Operating Income plus included depreciation and amortization, each divided by Revenue.
What is Adjusted EBITDA?
Some companies or lenders add selected expenses to EBITDA under their own definitions. This Tool does not calculate Adjusted EBITDA.
Results depend on user-entered information and all financial values should cover the same period. Accounting classifications vary; enter depreciation and amortization consistently with Operating Expenses to avoid double-counting. EBITDA is not cash flow, and Adjusted EBITDA may be defined differently by companies or lenders. This Tool does not determine accounting treatment, calculate Adjusted EBITDA or assess financial health. Informational use only; this is not accounting, tax, legal, investment or financial advice. Calculations run locally in your browser; inputs are not saved or sent to a server.