Ev/ebidt

sh50

Active Member
#1
This ratio is another valuation ratio that now appears in research reports

Enterprise value=Market Capitalization+Debt-Cash and cash equivalent which is ev here.

EBIDT is the operating profit.

To my mind, this is a far better valuation ratio both value wise and efficiency wise. Value wise because Debt is also covered and efficieny wise, the operating rather than net profits are taken which takes off the effect of leverage. Wonder why no one discussed this.
 

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