As the title states. Would a credit investor be more concerned about P/E or EV/EBITDA? I think it would be EV/EBITDA, but am struggling to come up with a good "why" answer to that.
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We care about EV / EBITDA - Capex.
EBITDA by itself does not fully account for the recurring cash needs of a business, so subtracting capex gives a better picture on valuation. A company could have great ebitda margins, but may have to spend a ton on capex, so not much free cash flow left over. That’s why better to compare multiples on an EBITDA less Capex basis.
Cash taxes are usually small or zero for distressed companies and assume working capital is zero.
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