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
Above 15% is strong, but it depends heavily on the industry (software high, retail low).
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.
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.
EBIT margin by sector
An EBIT margin only means something next to the company's own sector: software and pharma work with high margins, retail and industrials with low ones. The table shows median and range for every sector from our database, updated daily.
| Sector | Lower quartile | Median | Upper quartile | Stocks |
|---|---|---|---|---|
| Communication Services | -4.3 % | 4.4 % | 14.7 % | 1,168 |
| Information Technology | -2.6 % | 5.3 % | 13.4 % | 3,525 |
| Consumer Discretionary | 0.0 % | 5.3 % | 11.8 % | 3,738 |
| Materials | 0.0 % | 5.7 % | 13.5 % | 3,288 |
| Consumer Staples | 0.9 % | 5.9 % | 12.6 % | 1,738 |
| Industrials | 0.7 % | 6.6 % | 13.5 % | 5,303 |
| Health Care | -0.3 % | 7.4 % | 16.7 % | 2,168 |
| Energy | 0.0 % | 7.7 % | 21.0 % | 1,127 |
| Utilities | 4.6 % | 14.9 % | 25.5 % | 657 |
| Real Estate | 0.7 % | 17.8 % | 50.0 % | 1,782 |
| Financials | 9.7 % | 32.2 % | 51.6 % | 3,193 |
Source: the Fair Value Calculator database, 27,687 stocks with a valid value for EBIT margin, as of Sep 5, 2026. Median: half of the sector's stocks sit below it. Lower and upper quartile: 25 % sit below or above. Values move daily with prices. All valuation ratios by sector →