EBITDA Multiple

Definition

EBITDA Multiple gives an estimate valuation of a business operation, where value from investment activities (bills, bonds or stocks of other companies) is excluded. In other words, it estimates how many times of the EBITDA the business operation is worth. It is calculated as:

M = Business Operation Value/EBITDA

Where: M= EBITDA multiple; Business Operation Value = market value of the business taken at the end of year; EBITDA = (Operating Revenue - Operating Expenses + Other Revenue) calculated for year n

Use EBITDA Multiple in a sentence

You should try to make sure that you know how an ebitda multiple will work and try to use it in your best interest.

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If you want to get a good grasp of how your business has been doing you may want to figure out the ebitda multiple.

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The ebitda multiple gave us a really good estimate and we were really excited to move forward with everything in our company.

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