MarketLearn
Chapter 29Advanced~19 min total

EV/EBITDA

A multiple that ignores how the business is funded

EV/EBITDA compares the value of the whole business to its operating cash earnings. It is useful because it is independent of financing, but it has important blind spots.

Lessons

  1. 1A financing-neutral multipleAdvancedWhy EV/EBITDA lets you compare debt-heavy and cash-rich firms.~10 min
  2. 2Limitations of EV/EBITDAAdvancedIt ignores capital expenditure and changes in working capital.~9 min
Course positionChapter 29 of 35