Fairvalue-Calculator
EN DE
← All financial calculators
Free financial calculator

EBIT Margin Calculator

How much operating profit is left from each unit of revenue?

Also available in German: EBIT-Marge-Rechner (Ertragskraft) →

Inputs

EBIT (operating profit)

Also called: Operating income, earnings before interest & taxes

Where to find it: Income statement (middle), before interest and taxes.

How to derive: Revenue − operating costs (or: net income + interest + taxes).

Revenue

Also called: Sales, turnover, top line

Where to find it: Income statement, very first line.

How to derive: Units sold × price; stated directly in the income statement.

Result — live

EBIT margin
–

Above 15% is strong, but it depends heavily on the industry (software high, retail low).

More calculators

PEG Ratio Calculator — Is the Growth Fairly Priced?Calculate the PEG ratio in seconds (P/E ÷ growth): under 1 = cheap for its growth. Free,… P/E Ratio CalculatorCompute the P/E ratio in seconds and see instantly whether a stock looks cheap — free, … Price-to-Book CalculatorPrice vs. balance-sheet equity. Dividend Yield CalculatorPayout vs. price — plus payout-ratio check.

The EBIT margin shows how much operating profit is left from each unit of revenue — before interest and tax. It measures the pure earning power of the business and makes companies comparable regardless of financing and tax rate.

How the formula works

You divide operating income (EBIT) by revenue and express it in percent. It reveals how much of each sales unit survives all operating costs as profit.

EBIT margin = EBIT ÷ revenue × 100

Example: $1,200m EBIT on $6,000m revenue. Margin = 1,200 ÷ 6,000 × 100 = 20% — strong profitability.

How to read the result

  • Above 15%: strong earning power.
  • 7 to 15%: average.
  • Below 7%: thin margin — little buffer for setbacks.

What to watch out for

  • The margin is highly industry-dependent: software often exceeds 30%, retail sits below 5%. Compare only within one industry.
  • EBIT excludes interest and tax — highly leveraged firms look more profitable than they are at the bottom line.
  • One-off effects can distort a single period.

Frequently asked questions

How does EBIT margin differ from net margin?
EBIT margin measures operating profit before interest and tax; net margin measures profit after. EBIT makes firms with different financing comparable.
Is a higher margin always better?
Usually yes, but a very high margin attracts competition. What matters is whether the company can hold it over years.
Where do I get EBIT and revenue?
In our Fair Value Calculator EBIT, revenue and margin are already on file for 35,000+ stocks — no typing required.

Not financial advice · No buy/sell recommendations · Past performance is not a guarantee of future results.