EV/EBITDA: business value to earnings
EV/EBITDA is the value of the whole business including debt (EV) divided by EBITDA. It shows how many years of earnings before interest, taxes and depreciation it would take to pay for the whole company. Unlike P/E, it does not depend on how much debt the company has.
Formula
EV/EBITDA = EV ÷ EBITDA over 12 months
How to read it
- It compares companies with different debt. An indebted company's P/E looks lower than it is: whoever buys the business takes on its debt too.
- The standard in mergers. A buyer pays for the whole business, not just the shares.
- Not for banks. For a bank, debt is raw material, not financing. Banks are compared on P/E and P/B.
Live exampletrailing 12 months · data as of Nov 5, 2026
EV/EBIT is stricter: it accounts for equipment wear. If it is much higher than EV/EBITDA, the company spends a lot on fixed assets.
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EV / EBITDA (TTM) — value to earnings before depreciation
What the business is worth in EBITDA — earnings before interest, taxes, depreciation and amortization. The standard of M&A deals: it depends neither on the debt structure, nor on the tax jurisdiction, nor on how fast the company writes off its equipment.
EV / EBITDA (FWD) — the forward version
The same to next year's consensus EBITDA. If it is well below TTM, the market has already priced in operating earnings growth.
Frequently asked questions
What value is normal?
It depends on the industry: utilities and oil companies are usually at 6–10, fast-growing software at 20 and above.
Related terms
All 109 metrics for every stock, compared with its sector — in the terminal
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