EBITDA Margin

EBITDA margin measures the extent to which cash operating expenses use up revenue.

EBITDA margin is often more useful than operating margin for the same reasons that EBITDA is more useful than operating profit - it excludes non-cash items such as depreciation.

For financial Institutions, banks and insurance, Net Sales are replaced by Total Revenue or Total Income. Additionally, for financial institutions, our calculation of EBITDA excludes gains on investment and thus only includes the less volatile earnings. In contrast, EBIT margin measures the overall operating margin of the firm, including both recurrent and more volatile earnings.