EV/EBITDA: what it is and how to read it

What it is

The value of the whole company (shares + net debt) divided by EBITDA. Lets you compare companies with different levels of debt.

How to read it

EV/EBITDA is used to compare companies with different debt levels, because enterprise value includes debt. It ignores investment spending, so don't use it on its own.

Educational information; not a recommendation to buy or sell.