# EV/EBITDA

*Corporate Finance & M&A — Finicade finance glossary*

EV/EBITDA values the whole enterprise against its pre-interest, pre-tax, pre-depreciation earnings. It's the default M&A multiple because it's neutral to capital structure and tax, letting a leveraged company be compared with a debt-free one. Its blindness is deliberate and dangerous: excluding depreciation flatters businesses that must constantly replace their assets, which is why it suits software and misleads on manufacturing.

**Also known as:** EV/EBITDA multiple, enterprise multiple

**Related terms:** [Enterprise Value](https://finicade.com/glossary/enterprise-value), [EBITDA](https://finicade.com/glossary/ebitda), [Valuation Multiple](https://finicade.com/glossary/valuation-multiple), [P/E Ratio](https://finicade.com/glossary/p-e-ratio), [Comparable Company Analysis](https://finicade.com/glossary/comparable-company-analysis)

Source: https://finicade.com/glossary/ev-ebitda