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What does an EV/Ebitda multiple mean?

What does an EV/Ebitda multiple mean?

I recently introduced a new strategy to my weekly screening column, which assesses value by comparing enterprise value (EV) with cash profits (also known as earnings before interest, tax, depreciation and amortisation, or Ebitda for short). While the EV/Ebitda ratio can be a useful valuation metric, it is no panacea and has its share of high-profile critics, including the mighty Warren Buffett.

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