What is a good EV/EBITDA multiple?
A good multiple varies by industry and company size. Tech companies typically trade at 15-25x, utilities at 8-12x. Always compare against industry peers and historical averages.
How do you calculate implied enterprise value from EBITDA?
Multiply EBITDA by the EV/EBITDA multiple. For example, $10M EBITDA × 10x = $100M implied enterprise value. This is the standard M&A valuation shortcut.
What does a high EV/EBITDA multiple indicate?
A high multiple suggests growth expectations or market optimism. However, it may also signal overvaluation, so compare against industry peers and historical multiples.
Why do technology companies have higher EV/EBITDA multiples?
Growth-stage tech companies command higher multiples due to expected revenue and margin expansion. Mature industries like utilities have stable, predictable cash flows justifying lower multiples.
Does company size affect EV/EBITDA multiples?
Yes. Larger companies typically trade at 10-30% higher multiples than small caps due to lower risk, better liquidity, and greater financial stability.