EV/EBITDA
The Enterprise Multiple (or EV/EBITDA) ratio is used to determine the overall value of a company. The Enterprise Multiple helps a potential acquirer look at a company from a different angle, as it considers the company’s debt too, which is something not considered in most other multiples, e.g. in the P/E ratio. A lower ratio than its peer group or benchmarks may indicate its possible undervaluation, and a higher ratio would subsequently indicate an overvaluation.
Calculated as: Enterprise Value / Earnings Before Interest, Tax, Depreciation and amortization