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EV/EBITDA Calculator
Calculate enterprise value and the EV/EBITDA ratio for any stock. Get an EV breakdown, sector median comparison, and EBITDA sensitivity table — with live data for any US-listed ticker.
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Search a ticker or enter market cap, debt, cash, and EBITDA to calculate the EV/EBITDA ratio.
How to use this EV/EBITDA calculator
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 EBITDA. Or switch to manual mode and enter your own numbers — useful for private companies or scenario analysis.
Read the EV breakdown
Enterprise value = market cap + total debt − total cash. The breakdown table shows each component so you can see how much of the "price tag" is equity vs debt. Companies with heavy debt have EVs much larger than their market caps.
Compare to sector median
The calculator shows whether the stock trades at a premium or discount to its sector median EV/EBITDA. A discount may signal undervaluation — or declining business quality. A premium may be justified by superior growth or margins.
Stress-test with the sensitivity table
The EBITDA sensitivity table shows how the ratio changes if EBITDA grows or contracts by 10–20%. This is critical for cyclical businesses where current EBITDA may be at a peak or trough — the "true" multiple depends on normalized earnings power.
EV/EBITDA explained
When EV/EBITDA beats P/E
P/E uses net income, which is distorted by capital structure (interest expense), tax jurisdiction, and depreciation policy. EV/EBITDA strips all three away. When you're comparing two companies in the same industry — one levered, one not — EV/EBITDA gives you an apples-to-apples read on operating valuation.
This is why private equity and M&A analysts use EV/EBITDA as their primary screening multiple. It answers: "How much am I paying for the operating cash flow of this business, regardless of how it's financed?"
Capital-intensive vs asset-light norms
A SaaS company with 80% gross margins and minimal capex might trade at 20–30× EV/EBITDA. A steel manufacturer with 25% gross margins and heavy capex might trade at 5–7×. Both multiples can be "fair" — the difference reflects reinvestment needs and margin durability.
The key question: how much of EBITDA actually converts to free cash flow? A high EV/EBITDA on an asset-light business may be cheaper than a low multiple on a capital hog that spends 60% of EBITDA on maintenance capex.
Acquisition screening with EV/EBITDA
Enterprise value is the true takeover price — what an acquirer pays for the equity plus the debt they assume, minus the cash they receive. Screening for low EV/EBITDA in sectors with consolidation activity surfaces potential takeout candidates.
Historical acquisition multiples by sector: technology 15–20×, healthcare 12–16×, industrials 8–12×, energy 5–8×. If a stock trades well below where deals are getting done in its space, it's worth asking whether the market is underpricing the franchise.
How to calculate enterprise value
Enterprise Value = Market Capitalization + Total Debt − Total Cash & Equivalents. Some analysts also add minority interests and preferred equity, but for most public company screens, the three-variable formula is sufficient.
Think of EV as the price tag on the whole business. Market cap is what public shareholders own. But if you acquired the company, you'd also inherit its debt obligations and receive its cash balances. EV nets these out to show the all-in cost.
Interpreting the ratio
A low EV/EBITDA can mean: (1) the company is genuinely undervalued, (2) EBITDA is at a cyclical peak and the market expects it to decline, or (3) the business faces structural headwinds. You can't interpret the multiple without knowing which case applies.
Normalize EBITDA to mid-cycle levels before drawing conclusions. A commodity producer at 4× EV/EBITDA during a price boom may actually be expensive once the cycle turns. The sensitivity table in this calculator helps you model that scenario.
Limitations of EV/EBITDA
EBITDA ignores capex, working capital changes, and taxes — all real cash costs. A company with $10B EBITDA and $8B in required capex has very different economics than one with $10B EBITDA and $2B capex, yet EV/EBITDA treats them identically.
EV/EBITDA also fails for financial companies (banks, insurers) where debt is the raw material, not a financing choice. For financials, use P/B or P/TBV instead. And for pre-revenue or negative-EBITDA companies, use EV/Revenue or cash burn analysis.
Frequently asked questions
What is the EV/EBITDA formula?
EV/EBITDA = Enterprise Value ÷ EBITDA. Enterprise Value = Market Cap + Total Debt − Total Cash. EBITDA = Earnings Before Interest, Taxes, Depreciation, and Amortization (trailing twelve months).
What is a good EV/EBITDA ratio?
It depends on the sector. Technology 18–25×, healthcare 12–18×, industrials 10–14×, energy 4–8×. Always compare to sector peers and the company's own history, not to an absolute number.
EV/EBITDA vs P/E — which is better?
EV/EBITDA is capital-structure neutral (ignores how the company is financed) and useful for cross-company comparison. P/E is simpler and works for asset-light companies with clean earnings. Best practice: use both.
Why add debt and subtract cash in enterprise value?
If you buy a company, you inherit its debt (an obligation you must service or repay) and its cash (liquid assets you receive). EV = equity value + net debt. It represents the all-in acquisition cost.
Can EV/EBITDA be negative?
Yes — when EBITDA is negative (the company loses money at the operating level before D&A). A negative EV/EBITDA is meaningless as a valuation tool. For these companies, use EV/Revenue or cash runway analysis.
How is EV/EBITDA used in M&A?
Acquirers price targets using EV/EBITDA because it reflects the total takeover cost relative to operating cash flow. Historical deal multiples by sector provide a floor — if a stock trades below where deals happen, it's potentially underpriced.