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What Is EV-to-EBIDTA Ratio?


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.


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


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

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