What is a typical EBITDA multiple?
For most businesses with EBITDA of $1,000,000 - $10,000,000, the EBITDA multiple will be in the general range of 4.0x to 6.5x, increasing as EBITDA increases. However, due to growth prospects, high tech and healthcare/biotech firms tend to earn EBITDA multiples for their industry above this average norm.
What is a healthy EBITDA multiple?
EV calculates a company's total value or assessed worth, while EBITDA measures a company's overall financial performance and profitability. Typically, when evaluating a company, an EV/EBITDA value below 10 is seen as healthy.
Is 20% a good EBITDA?
For example, in the tech industry a company that has a higher EBITDA margin can be around 30% to 40%, while in other industries, like hospitality, a good EBITDA margin might be closer to 10% or 20%. A high EBITDA margin does not always reflect a business that is in good financial standing and overall financial health.
What does 10X EBITDA mean?
10X LTM EBITDA means, as of the specified date, the product of (i) 10.0 multiplied by (ii) the EBITDA for the twelve months ended as of the last day of the month immediately preceding the measurement date.