EBITDA Margin Calculator

Your details

Choose "Build from income statement" to enter revenue and individual cost lines. Choose "Direct entry" if you already know your EBITDA figure.
Total net revenue (gross sales minus returns and discounts).
USD
Direct costs of producing goods or delivering services (materials, direct labor, manufacturing overhead).
USD
Indirect operating costs excluding COGS and D&A: sales, marketing, G&A, R&D, rent, salaries not in COGS.
USD
Total non-cash charges for the period. These reduce EBIT but are added back to reach EBITDA.
USD
EBITDA marginStrong margin
40%

EBITDA as a percentage of net revenue

EBITDA4,000,000USD
EBIT (operating income)3,500,000USD
Gross profit6,000,000USD
Gross margin0.6%
Operating margin (EBIT margin)0.35%
40% %
Very thin<5%Below avg5%-10%Average10%-20%Above avg20%-30%Strong30%+
Gross margin0.6%
Operating margin0.35%
EBITDA margin40%

EBITDA margin: 40.0%

  • An EBITDA margin of 40.0% is exceptional - above 30% is typical of top-tier software, infrastructure, or platform businesses with high pricing power and scalable cost structures.
  • For every dollar of revenue, 40.0 cents convert to EBITDA - a total of $4,000,000 on $10,000,000 in revenue.
  • The margin waterfall shows gross margin at 60.0%, shrinking to an operating margin of 35.0% after OpEx, and landing at 40.0% EBITDA margin after adding back D&A. The gap between gross and EBITDA margin highlights the burden of operating expenses.
  • EBITDA margin is widely used in valuation (EV/EBITDA multiples) and loan covenants, but it excludes capital expenditure, working capital changes and debt service - always pair it with free cash flow when assessing financial health.

Next stepCompare your margin against the industry benchmarks in the reference table below. If your margin is below peers, focus first on COGS efficiency (gross margin) and then on SG&A leverage to find where value is being lost.

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