If a firm has an EV of $1,440 million and EBITDA of $350 million, what is its EV ratio?

Question:

If a firm has an EV of $1,440 million and EBITDA of $350 million, what is its EV ratio?

Financial Ratios:

Financial ratios can be referred to as mathematical analysis of the company's performance. Ratios are used in estimating how well a company has been performing. Financial ratios are usually computed from historical information. The main types of financial ratios include:

  1. Profitability ratios.
  2. Liquidity ratios.

Answer and Explanation:

what is its EV ratio?

The EV ratio is computed using the following formula:

  • {eq}\text{EV ratio}=\dfrac{\text{EV}}{\text{EBITDA}} {/eq}
  • EV=1440 Million.
  • EBITDA=350 Million.
  • {eq}\text{EV ratio}=\dfrac{1440}{350} {/eq}
  • {eq}\text{EV ratio}=4.114 {/eq}

Learn more about this topic:

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