Placing EV and EBITDA into Perspective, Value Case Studies

The purpose of today’s lesson is to thoroughly understand the EV/EBITDA metric—its uses and abuses and how to place the metric into context.

A hard look at a valuation ratio: EV/EBITDA.

This post will give you more background to the metrics discussed in Lecture 1 found here.

Valuation Ratios: Enterprise Value to Earnings before interest, taxes depreciation & amortization or (EV/EBITDA).

EBITDA are bullsh*t earnings! – Charlie Munger

EBITDA multiples are used to value or benchmark businesses. Unfortunately, the multiple changes with capital intensity, nature of the business, competitive position of the firm, and sustainability of the cash flow. Like a chain saw, EBITDA should have a warning label, “This tool can...