EV to EBITDA Ratio
Calculate the enterprise value over EBITDA ratio, a valuation ratio that measures a company’s total value (including debt and equity) relative to its EBITDA.
This ratio helps investors understand how many times the enterprise value exceeds the company’s EBITDA, providing insights into the company’s debt load and operating performance.
The formula is as follows:
\[\text{Enterprise Value to EBITDA Ratio} = \text{Enterprise Value} / \text{EBITDA}\]EV to EBITDA is the most common multiple in sector comparisons and takeover pricing because it is not affected by capital structure, tax rates or depreciation policy. That is also its limit: it ignores the capital expenditure needed to sustain EBITDA, so capital-intensive companies look cheaper than they are, and EV to EBIT (get_ev_to_ebit) or EV to free cash flow (get_ev_to_free_cash_flow_ratio) is a useful cross-check.
Also known as: EV/EBITDA.
EV to EBITDA Ratio in Python or via the MCP
Install the Finance Toolkit with:
pip install financetoolkit -U
Then call get_ev_to_ebitda_ratio as shown below.
from financetoolkit import Toolkit
toolkit = Toolkit(
["TMO", "DHR", "A"],
api_key="FINANCIAL_MODELING_PREP_KEY",
start_date="2021-01-01",
end_date="2025-12-31",
)
toolkit.ratios.get_ev_to_ebitda_ratio()
Or, after setting up the Finance Toolkit MCP, ask:
What EV/EBITDA multiples did Thermo Fisher Scientific, Danaher and Agilent trade at from 2021 to 2025?
Which returns:
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| A | 30.0759 | 24.0884 | 26.0937 | 23.6894 | 22.7554 |
| DHR | 23.3741 | 19.6229 | 24.9274 | 24.4558 | 23.2822 |
| TMO | 23.0008 | 20.5519 | 21.5992 | 21.0334 | 22.7626 |
Parameters
get_ev_to_ebitda_ratio accepts the following parameters.
| Parameter | Type | Description | Example |
|---|---|---|---|
show_daily | bool | Whether to show daily values: the close of each trading day against the statement figures of the latest period that has ended on or before that day (also when it ended before the start date), so no figures are used before their period closes. Defaults to False. | True |
diluted | bool | Whether to use diluted shares in the calculation. Defaults to True. | False |
rounding | int | None | The number of decimals to round the results to. Defaults to None, which uses the rounding of the Toolkit (4 unless set otherwise). | 2 |
growth | bool | Whether to calculate the growth of the ratios. Defaults to False. | True |
lag | int | list[int] | The lag to use for the growth calculation. Defaults to 1. | 4 |
compound | bool | Whether the growth is the compound annual growth rate over the lag (e.g. lag=5 for the five-year CAGR) instead of the total change. Defaults to False. | False |
standardize | bool | Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False. | True |
trailing | int | The number of periods to sum flows (income and cash flow statement items) over, with balance sheet items averaged over the same number of period ends. E.g. 4 with quarterly data gives the trailing twelve months (TTM) and 3 with annual data a three-year cumulative figure. Defaults to None, which uses the trailing twelve months (4 quarters) with quarterly data and single years with annual data. | 4 |