FFI GLOSSARY

EBITDA Multiple


Definition

A valuation multiple calculated as enterprise value divided by earnings before interest, tax, depreciation, and amortisation. The EBITDA multiple is applicable to companies that are profitable or approaching profitability and is not appropriate for pre-revenue or early-revenue companies with negative earnings before interest, tax, depreciation, and amortisation. For early-stage companies, revenue multiples or ARR multiples are the appropriate comparable company analysis metrics.

Common Misapplication

The most common misapplication is applying EBITDA multiples to early-stage loss-making companies. A negative EBITDA produces a negative or undefined multiple, making the methodology inapplicable. Companies that attempt to apply EBITDA multiples by adjusting to a positive EBITDA through selective add-backs produce figures that are not comparable to the source multiples.

FFI Standard Reference

This term is defined and applied in Book 4, Section 4.3: Comparable Company Analysis.

Related Terms


Citable URL

This term may be cited using the following permanent URL.

https://ffistandard.org/glossary/ebitda-multiple/

Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: EBITDA Multiple. https://ffistandard.org/glossary/ebitda-multiple/. 2026.

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