Benchmarks: EV/EBITDA

EV/EBITDA: Calculated by dividing Enterprise Value by EBITDA is often used to benchmark the fair market value of a company. It's key benefit over the P/E ratio is that it's capital structure-neutral (excludes interest expense and associated tax benefits) therefore, better at comparing companies with different levels of debt.

Companies with higher growth usually trade at higher EV/EBITDA multiples.