Calculate the EBITDA margin, a profitability ratio that measures the percentage of revenue that remains as earnings before interest, taxes, depreciation and amortization (EBITDA).

EBITDA margin approximates a company’s core operating profitability before the effects of financing decisions (interest), tax jurisdictions, and non-cash accounting choices around fixed and intangible assets (depreciation and amortization). This makes it a commonly used metric to compare operating performance across companies with different capital structures, tax regimes, and depreciation policies.

The formula is as follows:

\[\text{EBITDA Margin} = (\text{Operating Income} + \text{Depreciation and Amortization}) / \text{Revenue}\]

Also known as: EBITDA-to-revenue ratio.

No programming experience? With the Finance Toolkit MCP server, AI assistants such as Claude and ChatGPT can calculate the EBITDA Margin for you. Just ask in plain English.

Calculate the EBITDA Margin in Python

The EBITDA Margin is available in the Ratios module of the open-source Finance Toolkit. Install it with:

pip install financetoolkit -U

Then call get_ebitda_margin as shown below.

from financetoolkit import Toolkit

toolkit = Toolkit(["AAPL", "TSLA"], api_key="FINANCIAL_MODELING_PREP_KEY")

ebitda_margins = toolkit.ratios.get_ebitda_margin()

Parameters

get_ebitda_margin accepts the following parameters:

  • rounding (int, optional): The number of decimals to round the results to. Defaults to 4.
  • growth (bool, optional): Whether to calculate the growth of the ratios. Defaults to False.
  • lag (int | str, optional): The lag to use for the growth calculation. Defaults to 1.
  • standardize (bool, optional): Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False.
  • trailing (int): Defines whether to select a trailing period. E.g. when selecting 4 with quarterly data, the TTM is calculated.
Income Quality Ratio Return on Tangible Assets (RoTA) Return on Capital Employed (RoCE) Net Income per EBT Free Cash Flow Operating Cash Flow Ratio Tax Burden Ratio EBT to EBIT EBIT to Revenue Cash Tax Rate Tax Rate Divergence Free Cash Flow Margin Cash Return on Assets (CRoA)

The Ratios module page introduces the module, and the sidebar lists all of its functions.

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