The EBITDA margin calculated using this equation shows the cash profit a business makes in a year. The margin can then be compared with another similar business in the same industry.
An EBITDA margin of 10% or more is considered good.
For example, Company A has an EBITDA of $800,000 while their total revenue is $8,000,000. The EBITDA margin is 10%. Company B has an EBITDA of $960,000 and total revenue of $12,000,000 (EBITDA: $960,000/$12,000,000)."