This is revenue minus all expenses excluding tax, interest, depreciation and amortization. This measure gives the operational performance of the company and this percentage can be used to compare how two companies are performing. This is because this measure excludes the financial aspect from the Income Statement. For instance if one company has shown greater profits than another one on the same revenue then it shows that the first company is better. However if the cost of debt of the second company is higher then it may be the case that even though the second company is managed and run better because of financial reasons there is a discrepancy.
