EBITDA Multiple Calculator
Divide enterprise value by EBITDA to find the EV/EBITDA multiple, a widely used yardstick for how richly a company is valued.
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Enter enterprise value and EBITDA to see the multiple.
Worked example
With these example inputs:
- Enterprise value$12,000,000
- EBITDA$2,000,000
EBITDA multiple: 6
- The other way round0.17
- If the first figure were 10% higher6.60
Frequently asked questions
What is the EV/EBITDA multiple?
It is enterprise value divided by EBITDA. It shows how many times a year's operating cash earnings the whole business is valued at, useful for comparing similar firms.
Why use enterprise value instead of market cap?
Enterprise value includes debt and subtracts cash, so it reflects the cost to buy the whole business. That pairs naturally with EBITDA, which is also before financing.
What is the EV/EBITDA multiple in simple terms?
It tells you how many times a year EBITDA the whole company is worth. The tool divides the enterprise value by the EBITDA figure. A result of six means the firm is valued at six times its EBITDA. It is a quick way to gauge how pricey a company looks.
What is the difference between enterprise value and market cap?
Market cap is just the value of the company shares. Enterprise value adds in debt and subtracts spare cash. It reflects the cost to buy the whole business, not just the equity. This tool uses enterprise value, so do not enter market cap by mistake.
Is a lower multiple always better?
Not always, as a low multiple can signal weak growth or higher risk. A high multiple can be justified by strong, reliable earnings growth. The multiple only makes sense against similar companies in the same sector. Use it as a starting point, not a final verdict.