Why use EV/EBITDA as a multiple compared to other multiples?
Anonymous
Because EBITDA is calculated excluding interest, EV/EBITDA is often used when comparing companies with different amounts of financial leverage( as opposed to P/E...as opposed to EPS, which is calculated net of the companies interest expense). EBITDA is also useful in the valuation of companies that are capital-intensive by nature because (unlike net income) it excludes depreciation and amortization.
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