EV/EBITDA Multiple Calculator

About this calculator

Enterprise value is market capitalization + total debt − cash and equivalents, and the multiple is EV / EBITDA — because EV represents the theoretical cost to acquire the whole business (equity plus debt, minus cash the buyer would immediately recoup), and EBITDA strips out interest, taxes, depreciation, and amortization, both sides of the ratio are neutral to how a company is financed or how it depreciates its assets.

That capital-structure neutrality is exactly why analysts and M&A bankers favor EV/EBITDA over the simpler P/E ratio when comparing companies with very different debt loads or accounting choices — a lower multiple relative to peers can signal an undervalued company, though it needs to be checked against growth rate and industry norms rather than read in isolation.