Talk:EV/EBITDA

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1. "An advantage is that, as its numerator EV (Enterprise Value)includes the value of debt as well as equity, it is unaffected by a company's capital structure. Another one, for international comparisons for example, is that its denominator is not influenced by taxes."

Is it not also a problem with EV/EBITDA ratio that it does not take into account the capital structure?

2. "If some firms on the list have no debt and others carry significant amounts of debt, the latter will look cheap on a price to EBITDA basis, when in fact they might be over or correctly priced", Damodoran, Investment valuation.

I think that the paragraph 1 should be reformulated and include the risk associated with the different capital structure in the overall valuation.

--KG (talk) 09:30, 6 April 2008 (UTC)