Question

Which firm has the highest EBITDA margin?

	A	B	C	D
Sales	960	318	1550	725
COGS	730	233	1277	668
SG&A	72	35	90	49
Depreciation + Amort	165	28	60	27
EBIT	-7	22	123	-19
Net Income	-5	17	80	2

Answer 1

EBITDA=EBIT + Depreciation + Amortisation
EBITDA margin =EBITDA/Sales

For firm A:
EBITDA=-7 + 165=158
EBITDA margin =158/960=0.164583333

For firm B:
EBITDA=22 + 28=50
EBITDA margin =50/318=0.157232704

For firm C:
EBITDA=123 + 60=183
EBITDA margin =183/1550=0.118064516

For firm D:
EBITDA=-19 + 27=8
EBITDA margin =8/725=0.011034483

So, firm A has the highest EBITDA margin