##### Asked by: Procopio Drysdale

asked in category: General Last Updated: 31st January, 2020# How do you calculate EV Ebitda multiple?

**EV**/

**EBITDA Multiple**

**EV**divided by

**EBITDA**or earnings before interest, taxes, depreciation, and amortization.

**EV**(the numerator) is the company's

**enterprise value**(

**EV**) and is calculated as follows:

**EV**= Market Capitalization + Preferred Shares + Minority Interest + Debt – Total Cash.

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Thereof, how do you use EV Ebitda multiple?

With the ** EV ** / ** EBITDA multiple ** you can multiply by the company's own ** EBITDA ** to find the enterprise value of the company. Then you can subtract the net debt of the company to find the equity value of the business. After that point you can divide by shares outstanding to find the equity value per share.

Beside above, what does the EV Ebitda multiple show? ** EV **/** EBITDA is ** a ** ratio ** that compares a company's ** Enterprise Value ** . It looks at the entire market value rather than just the equity value, so all ownership interests and asset claims from both debt and equity ** are ** included. ( ** EV ** ) to its Earnings Before Interest, Taxes, Depreciation & Amortization ( ** EBITDA **.

In this regard, what is the average Ebitda multiple?

Selling price/ ** EBITDA ** median is 4.4x ** EBITDA ** multiples are highest for the information sector (11.1x) and the mining, quarrying, and oil and gas extraction sector (8.4x). Meanwhile, the lowest ** EBITDA ** multiples are in the accommodation and food services (2.6x) and the other services sectors (3.0x).

How do you calculate multiples?

Generally, multiples is a generic term for a class of different indicators that can be used to value a stock. A ** multiple ** is simply a ratio that is ** calculated ** by dividing the market or estimated value of an asset by a specific item on the financial statements.