EBIT margin calculator
EBIT margin equals EBIT divided by revenue. A healthy margin depends on the sector: software 15-25%, manufacturing 8-12%, retail 3-6%. The Damodaran NYU dataset (January 2026 update) is the freely citable benchmark for sector medians[Damodaran].
The formula
EBIT margin = EBIT / Revenue
Express the result as a percentage. Use trailing-twelve-month EBIT and revenue for cyclical businesses; use the latest annual for stable businesses.
Sector medians (2026)
Pulled from Damodaran NYU Stern's "Margins by Sector (US)" flat-file, January 2026 update.
| Sector | Median EBIT margin |
|---|---|
| Software (System) | 23.4% |
| Software (Application) | 15.6% |
| Semiconductor | 21.6% |
| Pharma (Drugs) | 13.9% |
| Healthcare Equipment | 12.7% |
| Manufacturing (machinery) | 11.6% |
| Auto & Truck | 5.1% |
| Retail (General) | 4.8% |
The full table is on the 2026 Damodaran medians page.
How to position vs the median
- Above sector median: the operating model is differentiated. Sage marker.
- At sector median: typical. Compare growth trajectory to peers next.
- Below sector median: red marker. Check whether the gap is structural (gross margin) or temporary (one-off OpEx).