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EBITDA is a metric used to evaluate a business’s operational profitability, excluding the impact of financial and accounting decisions such as interest payments, taxes, depreciation, and amortization. It is helpful in comparing companies of different sizes and industries, as it excludes variables that can vary across businesses.
Industry | Typical EBITDA Margin (%) |
SaaS | 20% – 40% |
E-commerce | 10% – 20% |
B2B Services | 15% – 25% |
Financial Services | 25% – 50% |
Healthcare | 10% – 15% |
Note: These benchmarks may vary depending on the industry, business model, and market conditions. Always compare your EBITDA margin to industry standards for a more accurate assessment of your performance.
Scenario:
Calculation:
Interpretation:
In this example, the company’s EBITDA is ₹700,000. This reflects the company’s earnings from core operations, excluding interest, taxes, depreciation, and amortization.
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Answers to Frequently Asked Questions
EBITDA is a financial metric that measures a company’s operational profitability by excluding interest, taxes, depreciation, and amortization.
EBITDA helps investors and analysts evaluate a company’s performance and compare it to industry standards, as it excludes variables that may differ between companies.
EBITDA is calculated by adding back interest, taxes, depreciation, and amortization to net income.
A good EBITDA margin varies by industry, but a higher margin generally indicates that the company is efficiently managing its operating costs.
Yes, this calculator can be used for businesses in all industries to evaluate operational profitability.