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EV/EBITDA Explained: A Key Valuation Multiple for Investors

Valutico

EV typically includes Market Capitalization, Debt, Minority Interest, and Preferred Equity, minus Cash & Cash Equivalents. A primary advantage is providing a “debt-neutral” valuation, making comparisons easier between companies with different capital structures. How to Calculate EBITDA?

EBITDA 52
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Leveraged Buyouts

Andrew Stolz

The concept of an LBO transaction is simple – private equity buys a company, fixes it up, repays its debt and then sells the company for a higher price to earn the profit. Senior Bank Debt / EBITDA 3.0x. Senior term bank debt. Capital Structure of an LBO.

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M&A Valuation Methods: Your Essential Guide with 7 Key Methods

Valutico

Analysts use financial metrics and multiples such as Price to Earnings (P/E), Price to Book (P/B), Enterprise Value to Sales (EV/Sales), Enterprise Value to EBITDA (EV/EBITDA), and Price to Book (P/B) ratios derived from trading data of similar public companies or deal pricing data of similar M&A transactions.

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M&A Terms Every Business Owner Should Know

Class VI Partner

It is typically the highest risk/highest potential return portion of a company’s capital structure. Multiple of Earnings Multiple of Earnings, similar to Multiple of EBITDA, refers to the multiple of a company’s earnings to establish the entity valuation of the company.