What is EV/EBITDA?
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EV/EBITDA is a valuation multiple that compares a company's Enterprise Value (market cap plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization. It is often used to compare companies with different capital structures.
Think about comparing a company's whole value to its core earnings. Enterprise value over EBITDA lets you compare firms with different debt levels.