FINOVIEW

EBITDA margin

#15
GUIDING QUESTION

What is the pure operating profitability of the business?

EBITDA strips out interest, taxes, depreciation and amortisation.

01.What it is

An indicator widely used by banks and investors to assess operating generation.

02.Component masses

  • EBIT
  • Depreciation, amortisation and provisions

03.Formula

MAIN FORMULA
EBITDA: EBIT + Depreciation and amortisation + Provisions

04.Interpretation

  • Positive and growing → good sign.
  • It is not real cash: it does not include changes in working capital or taxes.

05.Related to

  • Operating margin
  • Debt/EBITDA
  • Cash flow