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EV/EBIT Ratio: Definition, Calculation & Benefits
General Investing
11 minute read

EV/EBIT Ratio: Definition, Calculation & Benefits

Thomas Richmond
Thomas RichmondDec 11, 2024

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 …

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