EV/EBITDA Multiple Calculator
Divide enterprise value by EBITDA to get the capital-structure-neutral valuation multiple analysts use to compare companies.
How it works
EV/EBITDA = enterprise value ÷ EBITDA · EBITDA yield = EBITDA ÷ enterprise value × 100
The EV/EBITDA multiple compares the total value of a business to the operating cash earnings it generates before interest, taxes and non-cash depreciation. Because both the numerator (enterprise value) and the denominator (EBITDA) sit above the effects of financing and tax, the multiple is capital-structure neutral — far better than P/E for comparing companies with different debt loads. A lower multiple suggests a cheaper valuation, but sector, growth and capital intensity all shift what counts as normal.
Worked example
A company has a $23,000,000,000 enterprise value and $3,000,000,000 of EBITDA. The EV/EBITDA multiple is 23,000 ÷ 3,000 = 7.67×, and the inverse EBITDA yield is about 13.0%.
Frequently asked questions
Why use EV/EBITDA instead of the P/E ratio?
The P/E ratio is distorted by how a company is financed and taxed. EV/EBITDA strips out interest, taxes and depreciation, so it compares operating value on a level footing — especially useful across firms with different debt levels or in capital-intensive industries.
What is a typical EV/EBITDA multiple?
Broad markets often trade around 8–12×, but it ranges widely: fast-growing or asset-light companies command higher multiples, while cyclical or low-growth businesses trade lower. Always compare within the same sector.
What are the drawbacks of EV/EBITDA?
EBITDA ignores the real cash cost of capital spending and working capital, so it can flatter capital-heavy businesses. Pair it with free cash flow measures before drawing conclusions.
Related calculators
Educational estimate, not investment advice.