Difference between revisions of "EV/EBITDA"
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(As of July 16, 2021, the EV/EBITDA on the stock market in the United States is at 17.2x, which is quite high compared to its average of 10x since 1990. However, interest rates are very low and thus obvious alternatives available to investors outs) |
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Revision as of 22:22, July 31, 2021
The EV/EBITDA is the enterprise value of a company divided by its Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA).[1]
The enterprise value is a company's market capitalization plus its debt minus its cash on hand. In others, the enterprise value is how much it would cost to purchase a company.
As of July 16, 2021, the EV/EBITDA on the stock market in the United States is at 17.2x, which is quite high compared to its average of 10x since 1990.[2] However, interest rates are very low and thus obvious alternatives available to investors outside the stock market are unattractive.