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Definition
EBITDA Margin
EBITDA as a percentage of revenue — the primary profitability metric for acquisitions.
Definition
EBITDA margin measures how much of every dollar of revenue converts to operating earnings. It is the core metric in BizBuyScore's Financial Quality score. Higher margins mean the business retains more earnings relative to its size, improving both DSCR and overall attractiveness. Benchmarks vary significantly — professional services typically achieve 20–40%, while food & hospitality often ranges from 8–18%.
Formula
EBITDA Margin = EBITDA ÷ Revenue × 100
Worked Example
An accounting practice earns $200,000 on $600,000 revenue. EBITDA margin = 33.3%, well within the 30–40% professional services benchmark.
Related Terms
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