isn't revenue or EBITDA available to both debt & equity investors? so if you can use equity value / revenue, why not ebitda?
| +228 | UBS Accused of Favoring H-1B Workers While Cutting U.S.-Born Employees | 55 | 8h |
| +134 | ONLY THESE BANKS OR YOU STRUCK OUT | 36 | 35m |
| +111 | IB Energy Drink Tier List / Ranking | 73 | 21h |
| +91 | PJT M&A Group Selection 2026 | 14 | 2d |
| +59 | Firm Thinks I'm Lying About Offer | 18 | 1d |
| +51 | Feedback for internship first desk at IBD BB - personal fit, "don't be too confident" | 29 | 2d |
| +44 | Indiana University Fraternity Pipelines | 29 | 33m |
| +39 | Stay at Weak Dealflow Team or Lateral? | 12 | 3h |
| +32 | Rogo AI | 12 | 3h |
| +31 | Elite Boutique interview questions | 8 | 5h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Who said you can use equity value / revenue? But hey, maybe in these markets, even that could make sense.
its in BIWS 400 interview questions, they said you could use equity value/revenue but not equity value/ebitda
Think Equity Value / Rev is used when a company or the sector in general has negative EBITDAs
Thanks, I guess I'm confused abt 2 things
a) if you could use revenue, why not EBITDA, because they are both available to debt and equity holders right?
b) if the reason equity value is used instead of EV, due to EV being negative through a large cash balance, why would Revenue be positive and EBITDA negative if the company has a large cash balance?
you're right - EBITDA/rev is available to both debt and equity investors, thus the numberator also has to be available to both debt and equity investors - hence EV; EqV is only available to equity investors
apples to apples
B) Is an easy one, although hypothetical. You could have a publicly traded company that raised a large sum of equity to overcapitalize the balance sheet. For numerous reasons, the stock price tanks (law suit, patent infringement, product defect, proposed accretive growth/M&A initiative kiboshed, etc.). You could then have enterprise value market equity value, all things equal. This has to do with just financing so your company can very well be revenue positive but EBITDA negative. I’d have to guess it’s a growth stage, possibly tech firm.
Tenetur quos asperiores perspiciatis quisquam est. Et sequi est molestias laboriosam vitae. Reiciendis ipsa et explicabo soluta et qui aperiam ea. Autem sed aperiam provident facilis et sunt.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...