EBIT multiple: valuation benchmark in corporate financing

February 14, 2024

The EBIT multiple is a company valuation metric that represents the ratio of a company's value to its earnings before interest and taxes (EBIT). This metric is often used by investors and analysts to assess a company's valuation relative to its industry peers and to gain an understanding of the price the market is willing to pay for the company's earnings power. By analysing the EBIT multiple, startups and investors can gain insights into the market valuation, which is important for financing rounds, takeover negotiations or strategic decisions.