EV / EBITDA
EV/EBITDA is the enterprise value of a company divided by its earnings before interest, taxes, depreciation and amortization.
EV/EBITDA answers the question "What is a company being valued per each dollar of EBITDA?" A high (low) EV/EBITDA mean the company is potentially overvalued (undervalued).
Other similar metrics include :
EV/Revenues: How much is each dollar of revenues worth to investors?
EV/EBIT : Or each dollar of EBIT?
EV/Free Cash Flow : Or each dollar of FCF?
Formula
EV / EBITDA = Enterprise Value / Earnings Before Depreciation, Amortization, Interest and Taxes (TTM)
(See other glossary entries for the component calculations)