Question
Enterprise Value
The market value of the equlty of Hudgins, Inc., is $588,000. The balance sheet shows $27,000 In cash and $198,000 in debt, w
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Answer #1

EBITDA multiple = Enterprise Value / EBITDA

Enterprise value = Market Capitalization + Total Debt - Cash and equivalents

=$588000 + $198000 - $27000

=$759000

EBITDA = EBIT + Depreciation and Amortization

= $99000 + $143000

=$242000

EBITDA multiple = Enterprise Value / EBITDA

=$759000 / $242000 = 3.13636 = 3.14

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