EV/EBITDA Calculator
Calculate the EV/EBITDA multiple from market cap, debt, cash, and EBITDA.
Compare company valuations across sectors to spot cheap and expensive stocks.
The EV/EBITDA Multiple
EV/EBITDA is one of the most widely used valuation multiples in finance. It compares a company’s enterprise value (EV) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). Because it accounts for debt, it is more complete than the P/E ratio, which only reflects equity value.
Step 1 — Calculate Enterprise Value (EV):
EV = Market Capitalization + Total Debt − Cash and Equivalents
| Component | What it represents |
|---|---|
| Market Cap | What equity investors pay for the business |
| + Total Debt | The debt an acquirer would also take on |
| − Cash | Cash reduces the effective purchase price |
Step 2 — Calculate the multiple:
EV / EBITDA = Enterprise Value / EBITDA
Why EBITDA instead of net income?
EBITDA strips out capital structure (interest), taxes, and non-cash charges (D&A). This makes it easier to compare companies across different industries, countries, and tax situations.
Industry benchmarks (approximate):
| Sector | Typical EV/EBITDA |
|---|---|
| Technology / SaaS | 15 – 40x |
| Consumer discretionary | 10 – 20x |
| Healthcare | 12 – 20x |
| Industrials | 8 – 15x |
| Utilities | 8 – 12x |
| Energy | 5 – 10x |
| M&A deal benchmarks | 6 – 10x (varies) |
Interpreting the result:
A lower multiple relative to peers suggests the company may be undervalued. A higher multiple reflects growth expectations, strong margins, or market leadership. The multiple compresses as EBITDA grows — watching the trend matters as much as the snapshot.
Limitations:
EV/EBITDA does not account for capital expenditure intensity. A manufacturing company spending heavily on equipment will look artificially cheap compared to an asset-light software firm. For capex-heavy businesses, EV/EBIT or EV/EBITDA minus capex (sometimes called EV/EBITDA-capex) is a more honest measure.
How we build and check this calculator
This calculator runs entirely in your browser, so the numbers you enter stay on your device. The math behind it is written by hand and tested against worked examples and standard references before the page goes live.
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