Calculate the Enterprise Value (Market Cap plus Debt minus Cash) = $69.3 + $1.4 – $ 0.3 = $70.4B.Here are the steps to answer the question: What are the resulting historical and forward-looking multiples? For the full year of 2017, its EBITDA was reported at $5.04B and the current analyst consensus estimate for 2018 EBITDA is $5.5B. ABC Wholesale Corp has a Market Cap of $69.3B as of March 1, 2018, a cash balance of $0.3B, and debt of $1.4B as of December 31, 2017. Let’s walk through an example together of how to calculate a company’s EBITDA multiple. EBITDA = Earnings Before Tax + Interest + Depreciation + Amortization.Enterprise Value = (market capitalization + value of debt + minority interest + preferred shares) – (cash and cash equivalents).To Determine the Enterprise Value and EBITDA: What is the Formula for the EBITDA Multiple?ĮBITDA Multiple = Enterprise Value / EBITDA The above table is taken from CFI’s free guide to Comparable Company Analysis. The ratio takes a company’s enterprise value (which represents market capitalization plus net debt) and compares it to the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for a given period. This multiple is used to determine the value of a company and compare it to the value of other, similar businesses.Ī company’s EBITDA multiple provides a normalized ratio for differences in capital structure, taxation, and fixed assets and compares disparities of operations in various companies. The EBITDA multiple is a financial ratio that compares a company’s Enterprise Value to its annual EBITDA (which can be either a historical figure or a forecast/estimate). Updated SeptemWhat is the EBITDA Multiple?
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