EV/EBITDA Multiple Calculator

Background.

A buyer offers eight times EBITDA for a manufacturer earning $7.8 million a year before interest, tax, depreciation and amortisation. That values the business at $62.4 million, but the shareholders will not receive $62.4 million: the lenders are repaid first, the cash in the bank goes to the sellers, and only the remainder belongs to the equity. EV/EBITDA is the language of that negotiation, and its two everyday uses are reading the multiple implied by a market price and turning an offered multiple back into a price.

Enterprise value sits on top of the ratio because EBITDA is earned before any interest is paid, so it belongs to lenders and shareholders together. Dividing it into market capitalisation alone would pair a whole-company flow with one group's claim. Add the debt, take away the cash, and the ratio stops depending on how the company is financed: borrow $10 million and pay it straight out as a dividend, and in principle the equity value falls by about what the debt rises, leaving enterprise value and the multiple unchanged.

What belongs in the bridge is not fully agreed. Aswath Damodaran's definition, the one behind his free sector tables, has three terms: equity plus debt minus cash. The CFA Institute curriculum adds preferred equity, and practitioners often add non-controlling interests as well. Both extra fields start at zero here, which reproduces Damodaran's figure; fill them in for the fuller version, and benchmark only against multiples built the same way.

Multiples also carry a date. Damodaran's January 2026 table of 5,994 US firms runs from about 5.15× for oil and gas production to 34.75× for semiconductors, with advertising near 12.00× and internet software near 30.26×. A figure from another sector or another year says little about the company in front of you, and none of these numbers is investment advice.

What is ev/ebitda multiple calculator?

The EV/EBITDA multiple is enterprise value divided by earnings before interest, taxes, depreciation and amortisation, usually over the trailing twelve months. Enterprise value is the price of the operating business: the market value of its equity plus its interest-bearing debt, less its cash. Analysts speak of the result in turns, so 9.5× is 9.5 turns of EBITDA. Because EBITDA sits above depreciation and capital spending, it is an earnings measure rather than a cash flow, and the multiple says nothing about how much of that EBITDA must be reinvested to keep the business running.

How to use this calculator.

1. 01Choose a direction: solve for the multiple when you know what the company is worth, or for the value when you have a peer, precedent or offer multiple.
2. 02Enter trailing-twelve-month EBITDA, which must be positive, and check whether your peer multiples were built on reported EBITDA or on Adjusted EBITDA, since the two are not comparable.
3. 03For the multiple, enter the share price and fully diluted shares; for a private company, use the last funding round's price per share or an agreed per-share value. For the value, enter the target multiple.
4. 04Enter total interest-bearing debt, including finance leases, at book value, and cash plus short-term marketable securities.
5. 05Fill in preferred equity and non-controlling interests only if the company has them, then read the bridge: enterprise value less net debt and those claims is what the shareholders own.

The formula.

Solving for the multiple runs the bridge forwards: equity value E = share price × diluted shares, enterprise value EV = E + D + P + NCI − C, and the multiple is EV ÷ EBITDA, where D is total debt, P preferred equity, NCI non-controlling interests and C cash. Solving for the value runs it backwards: EV = target multiple × EBITDA, and implied equity = EV − D − P − NCI + C, which is allowed to go negative. Cash comes off enterprise value because it is not part of the operating business, and Damodaran's consistency rule is that once cash is netted out of value, its interest income must stay out of the denominator, which EBITDA does. The leverage line uses the opposite convention on purpose. Total debt ÷ EBITDA is computed on gross debt, because footnote 6 of the 2013 Interagency Guidance on Leveraged Lending says cash should not be netted against debt for that ratio. It is then placed against the two levels the guidance names, strictly above 4.0× and strictly above 6.0×. EBITDA of zero or less is refused: a negative multiple would read as a bargain when it signals the reverse. Debt entered at book value overstates enterprise value for a distressed company whose bonds trade well below par.

A worked example.

Frequently asked questions.

References& sources.

1. [1]Aswath Damodaran, NYU Stern School of Business — "Value Multiples" equity-valuation lecture notes. Slide 11 gives the classic and no-cash definitions: "Enterprise Value/EBITDA = Market Value of Equity + Market Value of Debt − Cash / Earnings before Interest, Taxes and Depreciation," with the consistency rule that when cash is netted out of value, none of the income from that cash may appear in the denominator. Slide 10 lists the five reasons for the multiple's adoption. Retrieved 2026-07-29. Primary academic source, free PDF.
2. [2]Aswath Damodaran, NYU Stern — Variable Definitions for the annually-updated valuation data sets: Enterprise Value = "Market value of equity + Market value of debt − Cash"; Value/EBITDA = "(Market Value of Equity + Value of Debt − Cash) / EBITDA", using book value of debt as a proxy for market value. This is the three-term bridge the calculator reproduces at its defaults. Retrieved 2026-07-29. Free.
3. [3]Aswath Damodaran, NYU Stern — Enterprise Value Multiples by Sector (US). Vintage January 2026, covering 5,994 US firms (4,822 excluding financials). Source of every sector figure quoted on this page: Oil/Gas (Production) 5.15, Advertising 12.00, Software (Internet) 30.26, Semiconductor 34.75. Updated annually — check the vintage before benchmarking. Retrieved 2026-07-29. Free.
4. [4]CFA Institute — refresher reading "Market-Based Valuation: Price and Enterprise Value Multiples" (2026 curriculum). Defines enterprise value as "total company value (the market value of debt, common equity, and preferred equity) minus the value of cash and investments," and states that "EV/EBITDA is preferred to P/EBITDA because EBITDA, as a pre-interest number, is a flow to all providers of capital" and that EBITDA is "not strictly" a cash-flow number because it ignores non-cash revenue and working-capital movements. Consulted as the independent second authority on the bridge; it disagrees with Damodaran on composition — see the intro. Retrieved 2026-07-29. Free summary page; the full curriculum is enrolment-gated.
5. [5]Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System and Federal Deposit Insurance Corporation — Interagency Guidance on Leveraged Lending, 21 March 2013 (attachment to Federal Reserve SR 13-3). Source of the 4.0× and 6.0× levels reported in the leverage read, and of footnote 6: "Cash should not be netted against debt for purposes of this calculation." Retrieved 2026-07-29. Primary regulatory source, free PDF.
6. [6]U.S. Securities and Exchange Commission, Division of Corporation Finance — Compliance & Disclosure Interpretations: Non-GAAP Financial Measures, Section 103. Governs the EBITDA figure used as the denominator here: Question 103.01 requires a differently-calculated measure to be titled "Adjusted EBITDA" rather than "EBITDA"; Question 103.02 requires reconciliation to net income rather than operating income. Relevant because a multiple built on Adjusted EBITDA is not comparable with peer multiples built on EBITDA. Retrieved 2026-07-29. Primary, free.