EBITDA Margin
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.
EBITDA Margin in Python or via the MCP
Install the Finance Toolkit with:
pip install financetoolkit -U
Then call get_ebitda_margin as shown below.
from financetoolkit import Toolkit
toolkit = Toolkit(
["LIN", "AI.PA"],
api_key="FINANCIAL_MODELING_PREP_KEY",
start_date="2021-01-01",
end_date="2025-12-31",
)
toolkit.ratios.get_ebitda_margin()
Or, after setting up the Finance Toolkit MCP, ask:
What were the EBITDA margins of Linde and Air Liquide from 2021 to 2025?
Which returns:
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| AI.PA | 0.2649 | 0.2257 | 0.2555 | 0.2754 | 0.3023 |
| LIN | 0.3221 | 0.3196 | 0.3628 | 0.3749 | 0.383 |
Parameters
get_ebitda_margin accepts the following parameters.
| Parameter | Type | Description | Example |
|---|---|---|---|
rounding | int | None | The number of decimals to round the results to. Defaults to None, which uses the rounding of the Toolkit (4 unless set otherwise). | 2 |
growth | bool | Whether to calculate the growth of the ratios. Defaults to False. | True |
lag | int | list[int] | The lag to use for the growth calculation. Defaults to 1. | 4 |
compound | bool | Whether the growth is the compound annual growth rate over the lag (e.g. lag=5 for the five-year CAGR) instead of the total change. Defaults to False. | False |
standardize | bool | Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False. | True |
trailing | int | The number of periods to sum flows (income and cash flow statement items) over, with balance sheet items averaged over the same number of period ends. E.g. 4 with quarterly data gives the trailing twelve months (TTM) and 3 with annual data a three-year cumulative figure. Defaults to None, which uses single-period flows (per quarter and not annualized with quarterly data). | 4 |