EBITDA Margin
EBITDA margin is a percentage measuring a company's profitability before deductions (which may be considered somewhat superfluous to the business decision-making process). These deductions are interest, taxes, depreciation and amortization, which are not part of a company's operating costs and although important, should be dealt with separately. Calculating the EBITDA margin allows people to compare and contrast companies of different sizes in different industries, because it breaks down operating profit as a percentage of revenue. This means that an investor, owner or analyst can understand how much operating cash is generated for each riyal of revenue earned and use the margin as a comparative benchmark.
Calculated as: (Earnings before interest, tax, depreciation, and amortization ÷ Sales revenue) X 100.