EV/EBITDA: Comparing Enterprise Value with Operating Earnings
EV/EBITDA relates enterprise value to earnings before interest, taxes, depreciation and amortization. Comparable definitions are essential when using it across companies.
Use the EV/EBITDA Calculator to enter your own figures and compare the result with the worked example below.
EV/EBITDA formula
EV/EBITDA = Enterprise value ÷ EBITDA
Worked example
| Item | Example value |
|---|---|
| Enterprise value | 1160000 USD |
| EBITDA | 200000 USD |
| EV/EBITDA | 5.8 |
These are illustrative inputs, not current prices, rates or recommended targets. Where a currency is shown, keep all comparable money amounts in the same currency; conversion examples identify the two sides separately.
How to interpret the result
EBITDA omits capital spending and working-capital needs. A low multiple alone does not demonstrate that a company is inexpensive.
Related calculations
Method and further reading
The example follows the FinMathly calculator method. For broader background, see Investor.gov: Introduction to investing. The background resource may use jurisdiction-specific terms; it does not replace the assumptions of this calculator.
Featured photograph: Pexels.