The enterprise value to earnings before interest, taxes, depreciation, and amortization ratio (EV/EBITDA) is a tool that investors can use to help determine if a stock is under- or overvalued. It considers how a company uses all its funds from stock and debt to generate profits from its primary business. Some investors feel that the EV/EBITDA ratio may be better than the more popular P/E ratio. In this video, you’ll learn how the EV/EBITDA ratio works, how it stacks up to the P/E ratio, and what insights it can provide investors.
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