ev and evitda

why ev/ebitda is prefered over p/e

1 Answer(s)


Difficult to say that Ev/EBITDA is preferred. Both ratios are used together.

EV/EBITDA focuses on just the operating margin, whereas P/E also includes impact of tax and interest.

If you want to compare 2 companies operationally and ignore any effect due to tax and interest then you will use EV/EBTDA.