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EBITDA Multiple Calculator

EBITDA Multiple Formula

The formula to calculate EBITDA Multiple is:

$\text{Enterprise value} = \text{Market capitalization} + \text{Value of debt} + \text{Minority interest}$

$+ \text{Preferred shares} - \text{Cash and cash equivalents}$

$\text{EBITDA multiple} = \frac{\text{Enterprise value}}{\text{EBITDA}}$

Description

EBITDA multiple is a financial metric that helps to determine the value of a company. It is calculated by dividing the enterprise value by EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). The enterprise value represents the market value of a company, including its debt and excluding its cash and cash equivalents.

Example Calculation

Let's assume the following:

Market Capitalization: $300,000
Value of Debt: $100,000
Minority Interest: $20,000
Preferred Shares: $30,000
Cash and Cash Equivalents: $15,000
EBITDA: $50,000

To calculate the Enterprise Value:

$\text{Enterprise value} = 300,000 + 100,000 + 20,000 + 30,000 - 15,000 = 435,000$

To calculate the EBITDA Multiple:

$\text{EBITDA multiple} = \frac{435,000}{50,000} = 8.7$

Therefore, the EBITDA Multiple is 8.7.