EV/EBIT multiple calculator

EV/EBIT equals Enterprise Value divided by EBIT. Enterprise Value equals market capitalisation plus total debt minus cash and marketable securities, plus minority interest, plus preferred stock. A typical mature large-cap trades around 14-18x; software 25-35x; cyclicals 8-12x^[Damodaran].

Building Enterprise Value

Market capitalisation              shares × share price
+ Total debt                        short-term + long-term + capitalised leases
- Cash and marketable securities    line on balance sheet
+ Minority interest                 if consolidated subsidiary < 100% owned
+ Preferred stock                   at liquidation preference
= Enterprise Value

Why EV/EBIT not P/E

P/E ignores leverage choice. Two companies with identical operating businesses but different debt loads will report different EPS but should trade at the same EV/EBIT. The multiple normalises for capital structure, which is exactly what an acquirer wants when sizing a bid.

When EV/EBIT beats EV/EBITDA

Capital-intensive businesses where D&A is a real economic cost.
Post-acquisition periods where purchase-accounting amortization distorts EBIT (use EV/EBIT cautiously and disclose the amortization).

Sector multiples (2026)

Refer to Damodaran's "EV/EBITDA Multiples by Sector" flat-file. EV/EBIT is roughly EV/EBITDA + 2-4 turns for capital-intensive sectors, less for SaaS.

See EBIT margin and Apple FY25 for a worked EV build.