EBITDA Margin 5 Year Average

Returns the five-year average EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin for a company.

Supported Symbol Formats

Type Format Example
US Stocks SYMBOL AAPL, MSFT

Formula

EBITDA Margin = EBITDA / Revenue

Why EBITDA Margin?

EBITDA margin is useful because it:

  • Excludes non-cash charges (depreciation, amortization)
  • Excludes financing decisions (interest)
  • Excludes tax jurisdictions
  • Shows core operating efficiency

Industry Benchmarks

Industry Typical EBITDA Margin
Software 30-50%
Telecom 30-40%
Manufacturing 10-20%
Retail 5-10%

Notes

  • Returns value as a decimal (0.30 = 30%)
  • Higher margin indicates better operational efficiency
  • Compare within same industry

Examples

=EBITDAMarginFiveYearAverage("MSFT")
Microsoft 5-year avg EBITDA margin
=EBITDAMarginFiveYearAverage("AAPL")
Apple 5-year avg EBITDA margin
=EBITDAMarginFiveYearAverage("GOOGL")
Alphabet 5-year avg EBITDA margin
=EBITDAMarginFiveYearAverage(A1)
Symbol from cell reference
=EBITDAMarginFiveYearAverage("MSFT")*100
Convert to percentage

When to Use

  • Assess operational efficiency
  • Compare companies with different capital structures
  • M&A valuation analysis
  • Cash flow proxy analysis

When NOT to Use

Scenario Use Instead
Gross margin GrossMarginFiveYearAverage()
Net profit margin NetMarginFiveYearAverage()
Current EBITDA margin ebitda_margins()
EBITDA growth EBITDAGrowthFiveYearCAGR()

Common Issues & FAQ

Q: Why is the value less than 1? A: EBITDA margin is returned as a decimal. Multiply by 100 to get percentage (e.g., 0.30 = 30%).

Q: Why do some analysts prefer EBITDA margin? A: It removes effects of different depreciation methods, tax rates, and financing decisions, allowing better apples-to-apples comparisons.

Q: What are limitations of EBITDA margin? A: It ignores capital expenditure needs (capex), so capital-intensive businesses may look better on EBITDA margin than they actually perform.

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