In enterprise value multiples, analysts often use EBITDA as a substitu…

Question

In enterprise value multiples, analysts often use EBITDA as a substitute for:

Accepted Answer

A. Cash flow

1. EBITDA strips out interest, tax, depreciation and amortisation.
2. What remains approximates the cash the business throws off.
3. So it stands in for cash flow.
_Source: OpenStax Principles of Finance 2e, Chapter 11, Stocks and Stock Valuation._

Answer

Card float

Answer

Cost floor

Answer

Case flow

In enterprise value multiples, analysts often use EBITDA as a substitute for:

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