The Enterprise Value to EBITDA (EV/EBITDA) ratio is a key financial metric to assess a company’s valuation. It compares the company’s total value (including debt) to its earnings from operations before non-operating costs like interest, taxes, and depreciation. This ratio is popular because it offers a more comprehensive view of a company’s value compared to other metrics that might exclude debt. Investors often use it to evaluate how expensive or cheap a company is relative to its profitability, especially across industries.
