Definition
Enterprise Value to EBITDA – Compares a company's total value (market capitalization plus debt, minus cash) to its core operating earnings, before financing costs. Useful precisely because it ignores capital structure — a company loaded up on debt to fund growth can look expensive on P/E (which is hit by interest expense) while still looking reasonably priced on EV/EBITDA, since the multiple sits above the finance-cost line. Found In: Income Statement, Balance Sheet Formula:
EV/EBITDA = (Market Capitalization + Total Debt - Cash) / EBITDA