Trending Content
| +95 | Are you “less ambitious” for having long term goals outside of NYC | 24 | 7h | |
| +37 | Interviews Are So Fake | 24 | 5h | |
| +33 | 2024 UK Election - Tories finished? | 20 | 17h | |
| +29 | Being Christian in investment banking | 14 | 11h | |
| +26 | Is my boss gaslighting me? | 3 | 6d | |
| +25 | Non-Competes Banned | 17 | 3m | |
| +22 | Ideas for things to do with a free semester before starting ft? | 9 | 1d | |
| +20 | Sabotaging Peers to Get Ahead? | 34 | 3d | |
| +18 | Best NYC neighborhood for single 30M | 12 | 2d | |
| +18 | Moelis has the cutest Analysts? | 4 | 7h |
Career Resources
Context
EV / EBITDA is generally told as a multiple Debt to equity (or EV or total capital) is generally told as a ratio
So what’s the difference other than being a fraction?
Both by definition are fractions. Most of the time, a multiple is greater than 1 and ratio comes out to be a % (and less than 1)
1) Multiple is also a ratio (in a sense that it has a numerator and a denominator) but instead of being commonly expressed as percentage e.g. 60% LTC it is expressed as e.g. 13.4x P/E (stock trades at 13.4 times its earnings)
2) Multiple is used for enterprise value (EV) such as e.g. EV/EBITDA or EV/Sales or earnings such as P/E and the main goal is to compare market/estimated value to an item on the financial statements; on the other hand, ratios are a much broader term used to describe comparisons between items on the financial statements (size of one relative to the other item) including any type of profitability, leverage and liquidity ratios. Hope this helps a bit.
Deserunt ad quidem id sunt voluptatum accusantium praesentium. Dolor quia aliquam inventore impedit nemo qui. Et eum repellat rem doloremque.
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...