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Valuation
Also called: EV to EBITDA, Enterprise value to EBITDA, Enterprise multiple
EV/EBITDA divides a company's enterprise value (market cap plus debt minus cash) by its EBITDA. Because it counts debt, it compares companies with very different borrowings more fairly than P/E.
EV/EBITDA = (Market cap + Total debt − Cash) ÷ EBITDA
Market cap ₹8,000 crore, debt ₹2,500 crore, cash ₹500 crore: enterprise value is ₹10,000 crore. With EBITDA of ₹1,000 crore, EV/EBITDA is 10.
EV/EBITDA divides a company's enterprise value (market cap plus debt minus cash) by its EBITDA. Because it counts debt, it compares companies with very different borrowings more fairly than P/E.
EV/EBITDA = (Market cap + Total debt − Cash) ÷ EBITDA. Market cap ₹8,000 crore, debt ₹2,500 crore, cash ₹500 crore: enterprise value is ₹10,000 crore. With EBITDA of ₹1,000 crore, EV/EBITDA is 10.
No. EV/EBITDA describes one aspect of a company, a price or a contract, and it is best read alongside other numbers and the business itself. Jivani Markets is a research and education platform; it does not give buy, sell or hold recommendations.