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Glossary · Valuation

EV/EBITDA

Company value including debt, divided by profit before interest, tax, depreciation and amortization.

Why it matters

It compares companies with different amounts of debt fairly, because it values the whole business, not just the shares.

How to read it

Typical ranges are 8x to 15x for mature companies. Capital heavy businesses deserve lower multiples.

Related

P/E ratioShare price divided by the last 12 months of earnings per share.Debt and cashWhat the company owes lenders, against the cash it holds.

In the Cluenex app, this explanation opens next to every ev/ebitda figure, with the live reading for the stock you are looking at. Open it in Cluenex