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EV/EBIT Calculator

Calculate EV/EBIT (enterprise value to operating income) for any stock with live data. Compare to sector medians, run EBIT sensitivity scenarios, and see how capital intensity affects the multiple. Free.

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Search a ticker or enter market cap, debt, cash, and EBIT to calculate the EV/EBIT ratio.

How to use this EV/EBIT calculator

1

Load a ticker or enter data manually

Type any US ticker (e.g. AAPL, CAT, XOM) and click Load to auto-fill market cap, debt, cash, and EBIT. Or switch to manual mode for private companies or scenario analysis.

2

Read the EV breakdown

Enterprise value = market cap + total debt − total cash. EBIT is operating income — earnings after D&A but before interest and taxes. EV/EBIT is always higher than EV/EBITDA for the same company.

3

Compare to sector median

The calculator shows whether the stock trades at a premium or discount to its sector median EV/EBIT. EV/EBIT is preferred when comparing across different capital intensity levels.

4

Stress-test with the sensitivity table

The EBIT sensitivity table shows how the ratio changes if EBIT grows or contracts by up to 40%. This is critical for cyclical businesses where EBIT may be at a peak or trough.

EV/EBIT explained

EV/EBIT vs EV/EBITDA — when does it matter?

EV/EBIT subtracts Depreciation and Amortization from the denominator, making it always higher than EV/EBITDA for the same company. For asset-light businesses (software, consulting) with minimal D&A, the two multiples converge. For capital-intensive businesses (manufacturing, utilities, airlines) with heavy depreciation, EV/EBIT can be 50% or more above EV/EBITDA.

That gap is not arbitrary — it reveals the real cost of keeping the asset base operational. A company that needs $2B in annual capex to maintain flat earnings power has a fundamentally different economics than one spending $200M.

When EV/EBIT beats EV/EBITDA

EV/EBIT is preferred over EV/EBITDA when comparing companies with different levels of capital intensity. An industrial company running 30-year-old machinery and a freshly-built plant may look identical on EV/EBITDA but diverge sharply on EV/EBIT — the older business has lower depreciation (book value may be near zero) while the new one shows high D&A.

EV/EBIT is also more relevant when acquisition goodwill generates large D&A charges that distort EBITDA comparisons across deal-driven vs organic-growth companies.

How EV/EBIT relates to EV/EBITDA

The relationship is simple: EV/EBIT = EV/(EBITDA - D&A). If a company has $10B EBITDA and $2B in D&A, EBIT is $8B. If EV is $100B, EV/EBITDA = 10x and EV/EBIT = 12.5x. The wider the gap, the more capital-intensive the business.

Comparing EV/EBIT and EV/EBITDA side by side is a quick way to gauge capex intensity: a small gap means asset-light; a large gap means capital-heavy. Use the EBITDA Calculator to reconcile both figures.

Limitations of EV/EBIT

EV/EBIT still ignores maintenance capex versus growth capex, working capital swings, and cash taxes. Two companies with identical EV/EBIT might have very different free cash flow profiles if one reinvests heavily and the other does not.

EV/EBIT is meaningless when EBIT is negative (the calculator returns N/A in that case). For pre-profit companies or businesses with temporarily depressed EBIT, normalize to mid-cycle earnings before drawing conclusions — or use EV/Revenue as an alternative.

Frequently asked questions

What is the EV/EBIT formula?

EV/EBIT = Enterprise Value ÷ EBIT. Enterprise Value = Market Cap + Total Debt − Total Cash. EBIT = Operating Income = EBITDA − Depreciation & Amortization (trailing twelve months).

Why is EV/EBIT always higher than EV/EBITDA?

Because EBIT subtracts D&A from EBITDA, making the denominator smaller. A smaller denominator gives a larger ratio. The gap between EV/EBIT and EV/EBITDA for the same company is a direct measure of capital intensity.

What is a good EV/EBIT ratio?

It depends on the sector. Software/SaaS: 25-40x. Technology hardware and healthcare: 18-28x. Industrials: 12-18x. Energy: 8-14x. Always compare to sector peers and the company's own history.

When should I use EV/EBIT instead of EV/EBITDA?

Use EV/EBIT when comparing companies with different capital intensity — one capital-heavy and one asset-light. EV/EBITDA treats them equally; EV/EBIT does not. Also use EV/EBIT when large goodwill amortization distorts EV/EBITDA comparisons.

Can EV/EBIT be negative?

EV is rarely negative (only when cash exceeds market cap plus debt). EBIT can be negative when operating losses occur. A negative EBIT makes EV/EBIT meaningless as a valuation ratio. The calculator returns N/A in that case.

How is EV/EBIT used in company analysis?

Analysts use EV/EBIT to compare acquisition targets across different capital structures. Because EV includes net debt and EBIT is pre-interest, the ratio is capital-structure neutral. Pairing EV/EBIT with EV/EBITDA reveals the D&A burden; pairing it with ROIC reveals whether capital deployed earns above its cost.

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