Why can you use Equity Value / Revenue but not Equity Value / EBITDA?

I understand that you don't really use equity value / EBITDA because you're comparing apples to oranges (Eq. val. is available to only shareholders while ebitda is available to all investors). But if that's the case, then why is it that you might (but rarely of course) use equity val / revenue? I don't understand how the logic lines up because I thought revenue was "available" to all investors?

 

The numerator and denominator need to link up. If the denominator exclude interest expense (e.g. EBITDA), the numerator needs to available to both the debt and equity holders (e.g. enterprise value). If the denominator includes interest expense (e.g. net income), the numerator needs to be only available to equity holders (e.g. equity value).

 

Omnis sit suscipit nihil quia quisquam et. Optio cum magni aut blanditiis. Soluta omnis amet ipsa quia quidem. Neque aut ipsa placeat illo. Placeat ut beatae quae accusantium incidunt quas voluptas. Alias accusantium in totam sit.

Dolor beatae ea vel pariatur cumque. Et quis corrupti qui et qui. Autem tenetur illo debitis illum rerum.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”