EBITDA Multiple Template

This EBITDA multiple template helps you find out the EBITDA multiple given the line items for determining the enterprise value.

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).  This multiple is used to determine the value of a company and compare it to the value of other, similar businesses.

A company’s EBITDA multiple provides a normalized ratio for differences in capital structure, taxation, fixed assets, and for comparing disparities of operations in various companies. 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.

The formula for calculating EBITDA multiple is:  EBITDA Multiple = Enterprise Value / EBITDA

To Determine the Enterprise Value and EBITDA:

• Enterprise Value = (market capitalization + value of debt + minority interest + preferred shares) – (cash and cash equivalents)
• EBITDA = Earnings Before Tax + Interest + Depreciation + Amortization

Credits to :  Corporate Finance Institute