EV/EBITDA (Enterprise Value to EBITDA)
A valuation multiple that accounts for debt and cash, comparing total company value to core operating profit.
What it means
EV/EBITDA is a favorite of analysts because it is capital-structure neutral: it includes debt and strips out non-cash items. That makes it easier to compare companies with different debt loads or tax situations than the P/E ratio.
Formula
EV/EBITDA = Enterprise Value ÷ EBITDA
Example
A company with an enterprise value of $12 billion and EBITDA of $1 billion has an EV/EBITDA of 12.
What is a good EV/EBITDA?
Lower generally means cheaper. Many companies trade around 8 to 12 times; below 8 can signal value, above 15 can signal a premium or high growth. Compare within a sector.
See it on real stocks
Every stock analysis page shows EV/EBITDA alongside the other key metrics: