Edge stretchability refers to a sheet metal’s capability to resist edge cracking during edge forming and flanging. In this article, a quantitative method has been proposed to evaluate the effect of punching or trimming of sheet metals on the degradation of their edge stretchability. This method adopts the Marciniak and Kuczynski concept to quantify edge damages due to punching or trimming. A novel index, the effective failure strain ratio, is introduced. Effective failure strain ratio is strain-based, and it is defined as the ratio of the actual edge failure strain to the theoretical edge failure strain. The algorithm to calculate effective failure strain ratio based on hole-expansion simulations is detailed. The magnitude of effective failure strain ratio depends on the damage value, which corresponds to the edge damage caused by preprocessing such as punching. Numerical studies are conducted to demonstrate the applicability of this method. The results show that the degradation of edge stretchability of materials with higher hardening exponent (n-value in power hardening law) is more sensitive to edge damage. Hole-expansion experiments using two grades of dual-phase steels are conducted to validate the conclusions deduced from the simulations. The comparison between the experimental and numerical results shows that the proposed method is able to predict phenomena appearing in the experiments. The quantitative relationship between damage value and the punching clearance has not been established in this work yet, which requires extensive experimental investigation. However, a qualitative link has been clearly demonstrated, and this method provides a new perspective to express the pre-damage and its effect straightforwardly.