EBITDA is Earnings Before Interest, Tax, Depreciation and Amortization. It is basically used to measure the operating performance (Cash Flow) of the company. It is calculated from the data of the company�s income statement.
EBITDA = Revenue � Expenses (excluding interest, taxes, depreciation and amortization)
EBITDA = Operating Profit + Depreciation Expense + Amortization Expense
EBITDA Margin is the measure of Business Operating performance with respect to the Total Revenue (Total Sales).
EBITDA Margin = (EBITDA / Total Revenue)
The optimum EBITDA Margin for the businesses varies for the based on the industry sector. Different companies have different EBITDA Margin.