EV/EBITDA
Definition
A valuation multiple comparing enterprise value to EBITDA, widely used to value businesses because it is unaffected by capital structure and non-cash charges. Lower multiples can indicate cheaper valuations.
Related Terms in Financial Analysis
Net Debt
A company's total debt less its cash and cash equivalents, showing the debt that would remain if available cash were used to pay it down. It is a cleaner gauge of leverage than gross debt.
Cash Flow Forecast
A projection of the cash expected to flow into and out of a business over a future period, used to anticipate shortfalls and surpluses and to plan financing and spending.
Sensitivity Analysis
Testing how a result — such as profit or a valuation — changes when one key assumption is varied, to see which assumptions matter most and how much risk they carry.
Scenario Planning
Building several plausible future cases — such as best, base and worst — and modelling the financial outcome of each, so a business can prepare for a range of conditions rather than a single forecast.
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