A
Glossary
Enterprise Value to EBITDA
Also: EV/EBITDA
Essential — core valuation theory
What it measures
Takeover price vs rough cash profit — what a buyer would pay for the whole business, debt included. The S&P 500 average sits around 12x. Not meaningful for banks.
Formula
Enterprise Value ÷ EBITDABenchmark
S&P 500 avg ~12x
Related metrics
Source
McKinsey, Valuation (7th ed.) ch. 13