EV/EBITDA

Enterprise Value divided by EBITDA, a key multiple for comparing companies.

EV/EBITDA divides a company enterprise value (market cap plus debt minus cash) by its EBITDA. Unlike P/E, it is capital structure-neutral, making it useful for comparing companies with different debt levels. A lower multiple may indicate undervaluation; a higher multiple may reflect growth expectations.

Because one firm carried more debt, analysts compared them on EV/EBITDA rather than P/E.