FREE TOOL
EV/EBITDA Calculator
Calculate Enterprise Value and the EV/EBITDA ratio for any company. This debt-adjusted valuation metric is preferred by professional analysts and investment bankers over P/E for comparing companies.
INTERACTIVE
EV/EBITDA Calculator
Enter values in billions ($B) to calculate Enterprise Value and EV/EBITDA.
ENTERPRISE VALUE
$12.0B
10.0 + 3.0 − 1.0
EV/EBITDA
8.0x
<8x
Attractive
8–12x
Fair
12–16x
Moderate
16–25x
Growth
25x+
High growth
Sector benchmarks vary. Compare within the same industry for meaningful results.
How to Use This Calculator
Enter the Market Capitalization in billions. This is the stock price multiplied by total shares outstanding. Find it on any financial website.
Enter Total Debt (short-term plus long-term debt from the balance sheet) and Cash & Equivalents (cash, money market funds, and short-term investments), both in billions.
Enter EBITDA in billions. You can find this on financial data sites, or calculate it by adding interest, taxes, depreciation, and amortization back to net income.
The calculator shows Enterprise Value (the true acquisition cost) and the EV/EBITDA multiple with a valuation context indicator. Compare the result against sector benchmarks below.
Understanding the Formula
ENTERPRISE VALUE
Market Cap + Total Debt − Cash
EV/EBITDA
Enterprise Value ÷ EBITDA
Enterprise Value captures the total cost of acquiring a business, including its debt. Unlike market cap, which only reflects the equity portion, EV shows what a buyer would actually pay. Two companies with the same market cap can have very different EVs if one carries significantly more debt.
EBITDA measures operating profitability before financing, tax, and accounting differences. By pairing EV with EBITDA, you get a ratio that compares companies on a level playing field regardless of how they are financed.
EV/EBITDA Benchmarks by Sector
Sector benchmarks are approximate. Always compare within the same industry for meaningful results.
When to Use EV/EBITDA vs P/E
USE EV/EBITDA WHEN
- · Comparing companies with different debt levels
- · Evaluating potential acquisition targets
- · Comparing across countries with different tax rates
- · Analyzing capital-intensive industries
- · Wanting a debt-adjusted valuation
USE P/E WHEN
- · Quick screening of stocks
- · Companies with minimal debt
- · Financial companies (banks, insurers)
- · Comparing against historical P/E range
- · Simple, intuitive comparison needed
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This calculator is for educational purposes only and does not constitute investment advice. EV/EBITDA is one of many valuation metrics and should not be used as the sole basis for investment decisions.