Formula
EV/EBITDA =
Enterprise Value /
Earnings Before Depreciation and Amortization Explanation
EV/EBITDA (Enterprise value/EBITDA) is a valuation multiple used in finance and investment to measure the value of a company. This important multiple is often used in conjunction with, or as an alternative to, the
P/E Ratio to determine the fair market value of a company.
Study has found that the companies with the lowest EV/EBITDA outperforms companies measured as cheap by other ratios such as
P/E Ratio.
Please read Which price ratio outperforms the enterprise multiple? Related Terms
Enterprise Value,
Earnings Before Depreciation and Amortization,
P/E Ratio