What to do if EBITDA margin is decreasing?
A shrinkage in EBITDA margin over two consecutive quarters might be due to business cyclicality. However, if the reduction is consistent over time, business owners or investors might start worrying about the reasons. Bad management decisions can make the EBITDA margin decrease. The stock price might be affected too. Here we recommend conducting a more extensive analysis: look into the enterprise structure (operations of the company) and the funding structure (capital employed). Read more