EV/EBITDA compares a company's enterprise value to EBITDA. It is a common valuation multiple for profitable businesses because it relates total firm value to operating earnings before financing costs.
Formula
EV/EBITDA = Enterprise value / EBITDA
EV/EBITDA should be interpreted with growth, margin durability, capital intensity, and cyclicality. Use it with EBITDA margin by industry and WACC by industry.
Related calculator: EV/EBITDA Multiple Calculator.