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Enterprise value/EBITDA (more commonly referred to by the acronym EV/EBITDA) is a popular valuation multiple used to determine the fair market value of a company. By contrast to the more widely available P/E ratio (price-earnings ratio) it includes debt as part of the value of the company in the numerator and excludes costs such as the need to replace depreciating plant, interest on debt, and ...
A valuation multiple [1] is simply an expression of market value of an asset relative to a key statistic that is assumed to relate to that value. To be useful, that statistic – whether earnings, cash flow or some other measure – must bear a logical relationship to the market value observed; to be seen, in fact, as the driver of that market value.
A company's earnings before interest, taxes, depreciation, and amortization (commonly abbreviated EBITDA, [1] pronounced / ˈ iː b ɪ t d ɑː,-b ə-, ˈ ɛ-/ [2]) is a measure of a company's profitability of the operating business only, thus before any effects of indebtedness, state-mandated payments, and costs required to maintain its asset base.
In expects the EBITDA multiple on most of its projects (those not associated with carbon dioxide enhanced oil recovery) to be 5.8 times. ... That is within the typical 3 times to 4.5 times range ...
MPLX EV to EBITDA (Forward) data by YCharts Meanwhile, midstream MLPs as a group traded at an average of a 13.7 EV/EBITDA multiple between 2011 and 2016, so both Energy Transfer and MLPs in ...
The value of a business is then arrived at using a similar multiple of the company's EBITDA as demonstrated by multiples of EBITDA achieved in past, completed transactions of comparable businesses in the sector. [1] [2] See valuation using multiples more generally.
Midstream master limited partnerships (MLPs) traded at an average enterprise value to EBITDA multiple of 13.7 between 2011 and 2016. Today, MLPs Energy Transfer and Enterprise trade well below ...
A frequently used terminal multiple is Enterprise Value/EBITDA or EV/EBITDA. The analysis of comparable acquisitions will indicate an appropriate range of multiples to use. The multiple is then applied to the projected EBITDA in Year N, which is the final year in the projection period. This provides a future value at the end of Year N. The ...