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AppleNVIDIABerkshireMetrics guide
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Metrics guide›Size and valuation

EV/EBITDA

Enterprise value divided by EBITDA: a common way to price a whole business before interest, tax and the cost of wearing out its assets.

Worked example · a round-number company

EV$11.0B÷EBITDA$1.0B=EV/EBITDA11.0x

How to read it

↓Lower is better. The usual yardstick when companies carry different amounts of debt.

Example Co. 11.0x
Under 8x8x to 16xOver 16x

Rough bands; asset-light growth companies trade far higher.

Keep in mind

  • EBITDA ignores capital spending, so capital-heavy businesses look cheaper than they are.

Related

Enterprise value (EV)EBITDA (operating income + D&A)EV/Sales