EV/EBITDA

EV/EBITDA compares enterprise value to EBITDA and is a common valuation multiple for profitable companies.

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.