This EBITDA multiple template helps you find out the EBITDA multiple given the line items for determining the enterprise value.
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The EBITDA multiple is a financial ratio that compares a company’s Enterprise Value to its annual EBITDA (which can be either a historical figure or a forecast/estimate). This multiple is used to determine the value of a company and compare it to the value of other, similar businesses.
A company’s EBITDA multiple provides a normalized ratio for differences in capital structure, taxation, fixed assets, and for comparing disparities of operations in various companies. The ratio takes a company’s enterprise value (which represents market capitalization plus net debt) and compares it to the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for a given period.
The formula for calculating EBITDA multiple is: EBITDA Multiple = Enterprise Value / EBITDA
To Determine the Enterprise Value and EBITDA:
Enterprise Value = (market capitalization + value of debt + minority interest + preferred shares) – (cash and cash equivalents)
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A well rounded financial analyst possesses all of the above skills!
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