EV / EBIT EV/EBIT
Enterprise value divided by operating profit — a debt-aware way to compare how expensive companies are.
What it is
EV/EBIT compares a company's enterprise value (its equity plus net debt) to its operating profit before interest and taxes. Because the numerator includes debt and the denominator is pre-interest, it values the whole business consistently. It is a popular multiple for comparing companies with different capital structures, more so than the equity-only price-to-earnings ratio.
Why it matters
Unlike P/E, EV/EBIT is not distorted by how much debt a company carries or by differing tax situations, so it allows fairer comparison across peers. A lower EV/EBIT generally signals a cheaper valuation, though it must be read against growth, returns on capital, and industry norms.
How it's calculated
Compute enterprise value as market capitalization plus total debt and preferred equity, minus cash and equivalents, then divide by EBIT (operating income) for the period. Use a consistent period for both, typically trailing twelve months or a forward estimate.
How Quintarthai uses it
EV/EBIT and related enterprise-value multiples are shown on each company's Ratios tab, where you can also screen and rank the universe by valuation multiples.