Enterprise Multiple

The Enterprise Multiple (also called EV/EBITDA) is a valuation metric that compares a company's Enterprise Value (market capitalisation plus net debt) to its Earnings Before Interest, Taxes, Depreciation, and Amortisation. It is calculated as: Enterprise Multiple = EV ÷ EBITDA. Unlike the P/E ratio, the Enterprise Multiple is capital-structure neutral — it treats companies with different levels of debt on the same basis, making it particularly useful for comparing companies within capital-intensive industries or when evaluating acquisition targets. A lower Enterprise Multiple generally suggests a company may be undervalued relative to peers. In Indian markets, EV/EBITDA is widely used by analysts covering infrastructure, manufacturing, metals, and telecom companies where debt levels vary significantly.