Plain-English definitions, reviewed by an independent investor
EV/EBITDA
EV/EBITDA values a whole business (debt included) against its core earnings, for cleaner cross-firm comparison.
EV/EBITDA values a whole business (debt included) against its core earnings, for cleaner cross-firm comparison.
EV/EBITDA = Enterprise Value รท EBITDA
Why it matters
It neutralises capital structure so you compare operating value, not financing.
Common confusion
Like EBITDA, it can flatter firms with heavy upkeep costs.
Frequently Asked Questions
Why add debt to value?
Because a buyer inherits debt; EV counts the whole price tag.
EV/EBITDA vs P/E?
EV includes debt and ignores interest/tax; P/E does the opposite.