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A company's earnings before interest, taxes, depreciation, and amortization (commonly abbreviated EBITDA, [1] pronounced / ˈ iː b ɪ t d ɑː,-b ə-, ˈ ɛ-/ [2]) is a measure of a company's profitability of the operating business only, thus before any effects of indebtedness, state-mandated payments, and costs required to maintain its asset base.
Investors should use a variety of tools for understanding a company's valuation before buying its stock. One of those valuation measurements is called EBITDA, an acronym for "earnings before ...
If you've read or listened to the earnings reports of companies you follow, you've probably heard the term "EBITDA." But what exactly does it mean, and why is it important? Why do some companies ...
One popular metric that analysts and other financial advisors use for determining the success of a company is EBITDA. It measures a company's earnings, excluding certain …
Enterprise value/EBITDA (more commonly referred to by the acronym EV/EBITDA) is a popular valuation multiple used to determine the fair market value of a company. By contrast to the more widely available P/E ratio (price-earnings ratio) it includes debt as part of the value of the company in the numerator and excludes costs such as the need to replace depreciating plant, interest on debt, and ...
A frequently used terminal multiple is Enterprise Value/EBITDA or EV/EBITDA. The analysis of comparable acquisitions will indicate an appropriate range of multiples to use. The multiple is then applied to the projected EBITDA in Year N, which is the final year in the projection period. This provides a future value at the end of Year N. The ...
MPLX EV to EBITDA (Forward) data by YCharts Meanwhile, midstream MLPs as a group traded at an average of a 13.7 EV/EBITDA multiple between 2011 and 2016, so both Energy Transfer and MLPs in ...
A professional investor contemplating a change to the capital structure of a firm (e.g., through a leveraged buyout) first evaluates a firm's fundamental earnings potential (reflected by earnings before interest, taxes, depreciation and amortization and EBIT), and then determines the optimal use of debt versus equity (equity value).