The Enterprise Multiple is company valuation tool that measures the amount required to acquire a company. Unlike other company valuation ratios, the enterprise multiple takes into account the company’s level of debt.
Enterprise Multiple = Enterprise Value ÷ EBITDA
Enterprise Value = Market value of common stock + Market value of preferred equity + Market value of debt + Minority interest - Cash and Investments
EBITDA = Earnings before interest, taxes, depreciation, and amortisation