What it is
Enterprise value (EV) is market cap plus net debt — the cost of buying the entire business. EBITDA is operating profit plus depreciation and amortization.
Formula
EV/EBITDA = (market cap + net debt) ÷ EBITDA. Lower values mean a cheaper price per unit of operating cash flow.
What to keep in mind
Because it includes debt, it compares leveraged and capital-intensive businesses (chips, telecom, chemicals) better than P/E, but it ignores the cash needed to replace equipment.
This explanation is general information, not investment advice. Rules reflect September 2026 and may change; check official exchange and broker notices.