EBIT Margin
The EBIT margin — also called operating margin — divides operating income (EBIT) by revenue and expresses it as a percentage. A 15% EBIT margin means 15 cents of every revenue dollar becomes operating profit.
The intuition
EBIT margin excludes financing (interest) and taxes, showing pure operational profitability. It is comparable across companies with different leverage and tax situations.
See also
Closely related
- Operating margin — identical concept
- Gross profit margin · Net profit margin
- EBITDA margin