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What is a good EBITDA margin?

By Justin Parker - Mar. 13, 2023

A good EBITDA margin can vary depending on the industry the organization is in, and the scale of its business. However, in general, a higher EBITDA margin exhibits an organization's potential to generate revenue before accounting for interest, taxes, depreciation, and amortization, which is a positive indicator.

A good and high EBITDA margin is relative to the organization's industry. For example, in the tech industry a company that has a higher EBITDA margin can be around 30% to 40%, while in other industries, like hospitality, a good EBITDA margin might be closer to 10% or 20%.

A high EBITDA margin does not always reflect a business that is in good financial standing and overall financial health. Some other factors that should be considered when examining the financial health of a company include:

  • Net income

  • Revenue growth

  • Cash flow

In addition, it is best to compare EBITDA margins between organizations in the same rather than different industries because organizations from different industries may have business models that are less similar.

What is a good EBITDA margin?
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