EV/EBITDA is a favourite valuation multiple because it ignores capital structure and depreciation policies, making companies easier to compare. Many mature companies trade at 8–12× EBITDA; fast growers much higher.
How to use the EBITDA Multiple Calculator
- Market capitalisation
- Value of debt
- Preferred shares
- Minority interest
- Cash and cash equivalents
- EBITDA
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter market capitalisation, debt, preferred shares, minority interest, cash and EBITDA.
Tips
- Take figures from the same financial statements and the same fiscal year.
- Compare ratios with companies in the same industry, not across industries.
- Use several valuation measures together; no single ratio tells the whole story.
- Market prices change every second – refresh the share price before you rely on a result.
Common mistakes to avoid
- Mixing per-share figures with company totals.
- Using trailing earnings for one company and forward earnings for another.
- Forgetting dilution from options and convertible securities.
Inputs explained
| Field | What to enter |
|---|---|
| Market capitalisation | Amount in your currency |
| Value of debt | Amount in your currency |
| Preferred shares | Amount in your currency |
| Minority interest | Amount in your currency |
| Cash and cash equivalents | Amount in your currency |
| EBITDA | Amount in your currency |
What each result means
- Enterprise value = [Market capitalisation] + [Value of debt] + [Preferred shares] + [Minority interest] – [Cash and cash equivalents]
- EBITDA multiple (EV/EBITDA) = [Enterprise value]÷[EBITDA]
Example values
How the main result changes when Market capitalisation changes and everything else stays at the example values above:
| Market capitalisation | EBITDA multiple (EV/EBITDA) (×) |
|---|---|
| 2,500,000,000 | 5.83 |
| 3,750,000,000 | 7.92 |
| 5,000,000,000 | 10 |
| 6,250,000,000 | 12.08 |
| 7,500,000,000 | 14.17 |
| 10,000,000,000 | 18.33 |
Formula
Enterprise value = market cap + debt + preferred shares + minority interest − cashEBITDA multiple = enterprise value ÷ EBITDAWorked example
Inputs — Market capitalisation: $5,000,000,000; Value of debt: $1,500,000,000; Preferred shares: $0; Minority interest: $100,000,000; Cash and cash equivalents: $600,000,000; EBITDA: $600,000,000.
Results — Enterprise value = $6,000,000,000.00; EBITDA multiple (EV/EBITDA) = 10 ×.
Frequently asked questions
What is a good EV/EBITDA?
Below about 10× is often considered reasonable; it varies by industry.
Why use EV instead of market cap?
EV includes debt, so it values the whole business.
Is a low multiple always cheap?
Not necessarily – it may reflect weak growth or high risk.
What formula does the EBITDA Multiple Calculator use?
Enterprise value = market cap + debt + preferred shares + minority interest − cash.