What is a good EBITDA margin for a small business?

Most healthy small businesses run an EBITDA margin between 10% and 20%. Service businesses and SaaS often run higher (20–35%+), while restaurants and retail typically run 10–15%. CFO Grade compares your EBITDA margin to industry-specific benchmarks across 16 sectors.

What DSCR do lenders look for?

Most SBA and commercial lenders require a Debt Service Coverage Ratio (DSCR) of at least 1.25x. Construction surety bonds often require 1.5x or higher. A DSCR below 1.0x means your EBITDA does not cover your annual debt payments.

How does CFO Grade calculate the letter grade?

CFO Grade scores 24+ financial ratios across profitability, liquidity, leverage, and efficiency — weighted by industry. The composite score maps to a letter grade from A+ to F. The full methodology and benchmark sources are described in the report and the disclaimer page.

Yes. The full analysis, 24+ ratios, letter grade, and industry benchmarks are completely free with no signup. Optional paid features include a $9 PDF export and a $19 Pro Pass with AI-generated CFO memo and 30 days of unlimited PDFs.

Do I need to create an account?

No account is required. Your numbers stay on your device unless you explicitly opt in to anonymized peer benchmarking. Pro entitlements are bound to your device with a restore link you can email yourself.

Is CFO Grade financial advice?

No. CFO Grade provides educational insights for business owners and analysts. It is not financial, tax, legal, or investment advice. Always verify the output with a qualified professional before making business decisions.

How does CFO Grade estimate what my business is worth?

Every report includes an Enterprise Value range built from your industry's typical EV/EBITDA multiple applied to your EBITDA, adjusted for size (Duff & Phelps size-discount methodology) and quality (your CFO Grade). The paid report unlocks the lender view vs. buyer view breakdown, implied equity to owners, sensitivity analysis, and full source-cited methodology. The dedicated valuation calculator lives at /valuation with industry-specific pages for 11 sectors.

Why does my business valuation change when I rerun the report?

The range moves with three things: your EBITDA (the biggest driver), your revenue size band (which sets the size discount), and your CFO Grade quality factor. When you run a second report in a later period, the Enterprise Value delta is shown prominently — 'You built $220,000 of value since Q3' or 'You lost $180,000 this quarter' — so you can watch the number that actually matters to lenders and buyers over time.

Benchmark · Manufacturing

What's a healthy debt to EBITDA for manufacturing?

Short answer

For manufacturing, a healthy debt to EBITDA is around < 3.0×. That's the threshold lenders and sureties underwriting manufacturing use as a pass/fail line.

Real peer data

Community median publishes once we have 5+ anonymous submissions from manufacturing. Currently at 0. Run your numbers below to help build it — your ratios are shared, your business name and dollar amounts are not.

Formula

Debt to EBITDA = Total Debt / EBITDA

Add up all interest-bearing debt (short-term + long-term). Divide by EBITDA.

Why debt to EBITDA matters for manufacturing

This is how acquirers, leveraged-buyout investors, and senior lenders measure how levered a business is. Most credit committees won't approve a deal above 4.0×. Above 5.0× is considered junk-rated leverage.

For manufacturing, debt to EBITDA is often the make-or-break number when applying for a loan, a line of credit, or (in construction) a bonding increase. Margins look fine on paper but cash never seems to grow.

Debt to EBITDA across other industries

Transportation & logistics< 3.5×

Common questions about debt to EBITDA for manufacturing

What is a good debt to EBITDA for manufacturing?+

For manufacturing, a healthy debt to EBITDA is around < 3.0×. The exact number depends on scale, region, and business model, but this is the range most banks, acquirers, and industry consultants treat as "healthy."

How is Debt to EBITDA calculated?+

Add up all interest-bearing debt (short-term + long-term). Divide by EBITDA.

Why does debt to EBITDA matter more for manufacturing?+

Lenders in this sector treat this as the minimum acceptable ratio. Falling below it doesn't guarantee a rejection, but it does guarantee more scrutiny, higher pricing, and often a personal guarantee.

What's the fastest way to improve my debt to EBITDA?+

Run your numbers through CFO Grade — the free memo pinpoints the two or three levers that move debt to EBITDA fastest for a business your size, in your industry. Common fixes for manufacturing include either accelerating debt paydown or restructuring existing debt to lower annual service..

See your debt to EBITDA — graded against manufacturing peers.

Paste your P&L. CFO Grade computes this — plus 23 other ratios — in seconds, with the manufacturing benchmark already loaded.

Other manufacturing benchmarks

Gross Margin

Target: 20–35%

EBITDA Margin

Target: 10–18%

Inventory Turnover

Target: 4–8×/yr

All benchmarks for this industry

Manufacturing financial health hub

Every metric that matters for manufacturing — margins, coverage, efficiency — with plain-English explanations.

Open hub