EV/EBITDA

Enterprise value divided by EBITDA — a capital-structure-neutral valuation metric.

In depth

EV (enterprise value) = market cap + debt − cash. EBITDA strips out interest, taxes, depreciation, amortization. EV/EBITDA allows comparison across companies with different debt levels and accounting treatments. Common in M&A and private equity.

Related terms

P/E Ratio (Price-to-Earnings)

A stock's price divided by its earnings per share — the most common valuation metric.

EBITDA

Earnings before interest, taxes, depreciation, and amortization.

Enterprise Value (EV)

Market cap plus debt minus cash — the theoretical takeover price.

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