EV/EBITDA Multiple Calculator
The EV/EBITDA multiple is a widely used, capital-structure-neutral way to value a company. It compares enterprise value, the cost to acquire the whole business, with EBITDA, a measure of operating cash earnings. Enter the market capitalisation, total debt, cash, and EBITDA. The calculator builds enterprise value and divides by EBITDA to give the multiple. Because it removes the effect of debt and tax, EV/EBITDA is well suited to comparing companies across different capital structures.
EV/EBITDA formula
Enterprise value = market cap + total debt - cash
EV/EBITDA multiple = enterprise value / EBITDA
EBITDA must be positive for the multiple to be meaningful; a negative or zero EBITDA makes the multiple undefined or not useful.
Worked example
Market cap $800,000,000, debt $300,000,000, cash $100,000,000, EBITDA $125,000,000:
- Enterprise value = 800,000,000 + 300,000,000 - 100,000,000 = $1,000,000,000.00.
- EV/EBITDA = 1,000,000,000 / 125,000,000 = 8.00.
EV/EBITDA: frequently asked questions
What is the EV/EBITDA multiple?
EV/EBITDA divides a company's enterprise value (EV) by its earnings before interest, taxes, depreciation, and amortisation (EBITDA). It is a capital-structure-neutral valuation multiple often used to compare companies with different debt levels and to value acquisition targets. Lower multiples can indicate a cheaper valuation, all else equal.
How is enterprise value calculated?
Enterprise value equals market capitalisation plus total debt minus cash and cash equivalents. It represents the cost to acquire the whole business: you pay for the equity and assume the debt, but the target's cash offsets part of that. This calculator can build EV from those components or take it directly.
Why use EV/EBITDA instead of the P/E ratio?
The P/E ratio is affected by capital structure and tax, because earnings come after interest and tax. EV/EBITDA strips out interest, tax, depreciation, and amortisation, making it easier to compare firms with different debt loads, tax situations, and depreciation policies. It is common in mergers and acquisitions analysis.
What is a normal EV/EBITDA multiple?
There is no single normal figure; it varies widely by industry, growth, and market conditions. The multiple is most useful as a relative measure, comparing a company against its peers or its own history. A figure that looks high or low only has meaning in context.
Official sources
- U.S. Securities and Exchange Commission: SEC.gov (financial reporting and non-GAAP measures including EBITDA).
- U.S. Securities and Exchange Commission, Investor.gov: Stocks.
Reviewed by the CalculatorHub team, edited by James Graham, 19 June 2026. See our methodology.