EV/EBIT

Valuation

Enterprise value against operating profit, before interest and taxes.

How it is worked out

Enterprise value divided by operating profit (EBIT) over the last twelve months.

How to read it

  • Like P/E, but untouched by how much the company borrows or the taxes it pays, so it compares companies with different debt more fairly.

Example

Enterprise value $12bn, EBIT $1bn: an EV/EBIT of 12.

Related terms

Related pages

The other pages on US stocks, free to read. On the company pages, the last three fiscal years are open to everyone, five with a free account, and every year with Ploutos Investor.

US stocksThe market today, the sectors, the largest companies and the week's results.The market's sectorsThe 11 sectors side by side: returns, share of the market, median P/E and dividend.Compare stocksTwo companies side by side: price over up to ten years, with and without dividends, and every figure.US dividend stocksEach dividend's yield next to whether the company's cash covers it and whether it was ever cut.

Explanations of terms for learning, with examples from SEC filings.