This valuation ratio is very closely related to EV/EBITDA and EV/EBIT. It is:


It is usually preferable to use EV/EBITDA rather than EV/EBITA. The calculation is barely more complicated (the extra work needed is to add depreciation to the denominator) and it has the advantage of correcting for both major non-cash items.

EV/EBITA may sometimes be useful when insufficient information available to calculate an EV/EBITDA.