# EV/EBIT

Enterprise value divided by operating profit.

## Definition

EV/EBIT compares the value of the entire business (equity plus debt minus cash) to its operating profit. Cleaner than P/E because it isn't distorted by capital structure or non-operating items.

## Formula

Enterprise Value ÷ Operating Profit

## Why it matters

EV/EBIT is the multiple credit investors and acquirers usually look at first, because it values the whole business — debt and equity together — against the cash flow available to all capital providers. Very useful for comparing companies with different debt loads.

## How Standard Equity uses it

Shown in the main table. For banks, insurers and broker-dealers the table shows Price-to-Tangible-Book (P/TBV) instead.

## The metric

| Category | Valuation |
| -------- | --------- |
| Unit     | x         |

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