EBITDA Multiple
The ratio of enterprise value to earnings before interest, taxes, depreciation, and amortization. A tech company selling at 8x EBITDA means a buyer pays $8M for $1M in annual EBITDA. Multiples vary dramatically by industry, growth rate, and deal size.
Where This Matters
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Enterprise Value (EV)Seller's Discretionary Earnings (SDE)Quality of Earnings (QoE)Add-BacksDue DiligenceLetter of Intent (LOI)Holdback (Escrow)Earn-OutAsset SaleStock Sale (Equity Sale)GoodwillPersonal GoodwillCommunity PropertySeparate PropertyPereira MethodVan Camp MethodTransmutationBuy-Sell AgreementShotgun Clause (Russian Roulette Clause)Right of First Refusal (ROFR)View all →