EBITDA stands for earnings before interest, taxes, depreciation and amortisation. It is a measure of a company’s profit at the operating level.
EBITDA tells investors how much profit a company generates after subtracting costs such as raw material, manpower and other operational costs.
EBITDA margin refers to the ratio of EBITDA to sales in percentage terms, and is calculated as EBITDA/Sales * 100.
It helps in comparing the operating efficiency of companies in the same sector, regardless of their size.
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