EV/EBIT Ratio: Definition, Calculation & Benefits
What is EV/EBIT? EV/EBIT is a financial ratio that stands for Enterprise Value (EV) to Earnings Before Interest and Taxes (EBIT). This ratio helps long-term investors evaluate whether a company’s stock is fairly valued. EV/EBIT measures a company’s total value (including debt obligations) relative to its operating income, or EBIT. Unlike other valuation metrics like …