Definition

EV/EBITDA

Enterprise value — market value of the equity plus net debt — divided by EBITDA. It compares the whole capitalized business to its pre-depreciation operating cash generation, which makes it comparable across different capital structures and tax situations. Enterprise value requires a market price and arrives with the licensed market-data feed; the EBITDA and net-debt inputs below come from the filing.

Formula

EV/EBITDA = (Market cap + Total debt − Cash) ÷ (Operating income + D&A)

Drivers — what actually moves it

Expected growth: as with every multiple, faster expected operating growth supports a higher one.
Capital intensity: EBITDA ignores depreciation — a real cost for asset-heavy businesses — so intensity decides how much of it converts to cash.
Risk / rates: the required return on the whole enterprise, debt and equity together.
Leverage neutrality: using EV and a pre-interest earnings line removes financing choices from the comparison — the reason the pair is matched.

Where to find it in the filing

Income statement + cash-flow statement (EBITDA inputs); balance sheet (net debt); market cap is market data. 10-K Item 8 — operating income on the income statement, depreciation and amortization on the cash-flow statement, debt and cash on the balance sheet.

XBRL concepts Echelon grounds to: OperatingIncomeLoss · DepreciationDepletionAndAmortization · LongTermDebtNoncurrent · CashAndCashEquivalentsAtCarryingValue

Prove it on a model

Basic LBO on AAPL’s filing“Walk me through a basic LBO.”

Sector caveats — where this breaks

Misleading for capital-intensive businesses if read alone — depreciation approximates a real, recurring reinvestment cost there.
Breaks for banks and insurers: deposits and float make enterprise value ill-defined; use P/E or book multiples instead.

EBITDA EV/Sales P/E ratio Enterprise value

Educational use only — not investment advice. Figures come from public SEC filings; Echelon teaches you to analyze data, it never recommends buying or selling any security.