What Is EV-to-EBIDTA Ratio?

EV-to-EBIDTA

It is used in comparing similar companies in the same industry. It is used in trading comparables analysis and uses the EBITDA of a company as the driver of its value. It is similar to EV to EBIT, except that we need to deduct the depreciation and amortization from EBIT.


EV/EBIDTA Ratio

EBITDA is unaffected by Capital Structure, It Strips Out Differences Between Amortization and Depreciation Policies, and it is unaffected by Asset Step-ups



View:

Lower is the better, Should be viewed in tandem with peers.


Where to find the data?

EV = Equity value + Debt – Cash & Cash Equivalents

EBIT= Revenue - Operating - Non-Operating expenses +Deprecation & Amortization


Related Concept

What is EBITDA?

Enterprise Value