EV/EBITDA Calculator

Use this EV/EBITDA calculator to turn enterprise value and EBITDA into a valuation multiple. Compare companies fairly across debt and tax profiles.

What it does

The EV/EBITDA Calculator divides a company's enterprise value by its EBITDA to produce a capital-structure-neutral valuation multiple, showing how many times operating cash earnings the whole business is priced at.

Data sources & parameters

This calculator uses standard financial formulas and runs entirely in your browser. It needs no external rate data — your result is computed only from the values you enter above.

We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.

The formula

EV/EBITDA = Enterprise value ÷ EBITDA

How it works

Enter the enterprise value (market cap plus debt minus cash) and EBITDA, and the tool divides one by the other. A lower multiple can signal a cheaper valuation, a higher one a richer or faster-growing business.

Where it is used

Comparing valuations of companies with different debt and tax profiles
Screening acquisition or investment targets against sector benchmarks
Sense-checking a takeover offer or private-company price

Worked example

A company with an enterprise value of $7,500,000.00 and EBITDA of $750,000.00 trades on an EV/EBITDA multiple of …, meaning the whole business is priced at that many times its annual operating earnings.

What the EV/EBITDA calculator does

The EV/EBITDA calculator converts enterprise value and EBITDA into a valuation multiple that shows how expensive or cheap a business looks relative to the cash its operations generate. It is widely used in company valuation, private equity, and mergers and acquisitions because it lets very different businesses be compared on the same basis. The tool shows the multiple and a chart that puts the two figures side by side.

How the multiple is calculated

Divide enterprise value by EBITDA. A company with an enterprise value of 7.5 million and EBITDA of 750,000 has an EV/EBITDA multiple of 10: the whole business is priced at ten times one year of its operating earnings.

Enterprise value is the cost of acquiring the entire business, not just its shares: the market value of the equity plus the debt a buyer would inherit, minus the cash on the balance sheet that the buyer would effectively receive. EBITDA, earnings before interest, taxes, depreciation, and amortisation, approximates the cash profit from operations before financing and accounting choices.

Together they tell you how many units it costs to own the whole business for every unit of operating earnings it produces each year.

Why analysts use EV/EBITDA

The multiple is largely neutral to how a company is financed and how it is taxed. A business loaded with debt and one funded entirely by equity might earn identical operating profits, yet their net earnings and share prices could look very different. Enterprise value already includes debt, and EBITDA sits above interest and tax in the income statement, so two companies with the same operating economics tend to land on similar multiples even if their balance sheets look nothing alike.

Depreciation and amortisation are non-cash charges that depend heavily on past investment and accounting policy. Removing them brings capital-heavy and capital-light businesses closer to a common basis, though it can also flatter companies that need constant reinvestment to keep running.

How to use the calculator

Enter the enterprise value: market capitalisation plus total debt, minus cash and equivalents.
Enter EBITDA for the same period, usually the last twelve months or a forecast year.

The tool displays the multiple with the two source figures alongside, and the chart contrasts enterprise value with EBITDA.

Enter the numbers for a company you are researching, then for a couple of its competitors. A business trading at a noticeably lower multiple than its peers may be undervalued, in trouble, or simply growing more slowly, and the gap is your prompt to find out which.

Reading the result in context

The same multiple can be cheap in one sector and expensive in another. Software and other high-growth industries routinely trade at double-digit multiples because buyers are paying for expected future earnings. Utilities, manufacturers, and other steady, capital-intensive businesses typically sit lower, reflecting slower growth and heavier reinvestment needs.

Market conditions move the whole range as well: multiples expand in optimistic markets and compress in downturns. A multiple of 10 is a starting point for comparison against sector peers, historical averages, and the price implied by a deal on the table.

Limits of the multiple

EV/EBITDA is a shortcut, not a full valuation. Because it ignores depreciation and amortisation, it can make capital-hungry businesses look cheaper than they are once the cost of maintaining their assets is counted. It says nothing about growth on its own, and a low multiple on a shrinking company is not the bargain it appears.

Companies sometimes present adjusted EBITDA figures that add back a long list of supposedly one-off costs, which inflates the number and lowers the multiple. Check what is included before trusting the result, and follow up on growth, cash flow, and debt.

This article is general information only and is not financial advice.

About This EV/EBITDA Calculator

Use this EV/EBITDA calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.

Frequently asked questions

How does the EV/EBITDA calculator work?

Enter a company's enterprise value and its EBITDA, and the calculator divides the first by the second to give the EV/EBITDA multiple. The result tells you how many times a full year of operating cash earnings the entire business is priced at, so you can compare it with peers or a target range.

What is a good EV/EBITDA multiple?

There is no single right number. Multiples vary widely by sector, growth rate, and market conditions. Mature, slow-growing businesses often trade in the mid-single digits, while high-growth companies can command double-digit multiples. The figure is most useful compared with similar companies.

Why use EV/EBITDA instead of the P/E ratio?

EV/EBITDA looks at the whole enterprise, including debt, and strips out interest, tax, depreciation, and amortisation. That makes it more comparable across companies with different capital structures and tax situations than the price-to-earnings ratio, which is based on equity value and net profit after those items.

What counts as enterprise value?

Enterprise value is the market value of equity plus total debt, minus cash and cash equivalents. It represents the theoretical cost of acquiring the whole business, because a buyer takes on the debt but gains the cash on the balance sheet.

Does the currency matter?

No. The multiple is a ratio, so it has no units. Enter enterprise value and EBITDA in the same currency and the result is identical whether you work in dollars, euros, pounds, or any other currency.

Is my data kept private?

Yes. The calculation runs entirely in your browser. Nothing you enter is uploaded, stored, or shared with anyone.

About the author

Written and reviewed by

Taha Kheirandish

Economics student and independent researcher

Taha Kheirandish reads tax codes the way other people read maps — to find out where a system actually leads, not where it claims to go.

He is an economics student, and his work here is comparative by design. A pension deferral bonus in Quebec, a commuting allowance in Germany, a rent-increase ceiling in the Netherlands: each is a decision a government made about how money should move, and each reads differently once you set it beside eight others. He builds and checks these calculators across nine markets from primary sources — the regulation rather than a summary of it, the ministry’s own circular rather than a news item quoting it.

That is the editorial standard of the site as well as his habit. Every rate, threshold and bracket here carries the document it was read from and the date it takes effect, and gets re-checked when the law moves rather than when someone happens to notice.

He is a researcher, not a licensed adviser, and nothing on this site is personal financial advice. It is arithmetic done carefully with its sources shown — so that you can check it, and take it to someone who is.

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