Why Is EBITDA Multiple Used for Valuation Rather Than Sales

question 19

Essay

Why is EBITDA multiple used for valuation rather than sales or earnings?

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Definitions:

Graduates

Individuals who have successfully completed a course of study at a college, university, or other educational institution.

Rocks

Rocks refer to solid mineral material forming part of the surface of the earth and other similar planets, exposed on the surface or underlying the soil or oceans.

Statistician's Fallacy

The error of ignoring the variability inherent in data or conclusions derived from statistical processes.

Logic

The systematic study of the principles of valid inference and correct reasoning.