Corporation Tax and EBITDA multiple: Difference between pages

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1.  
1.
A method of business valuation which is based on accounting Earnings before interest, tax, depreciation and amortisation (EBITDA) and the ratio of entity value to EBITDA of a comparable business (or a comparable group of businesses).


(CT).  
EBITDA mulitiple = Total value of firm ÷ EBITDA.


The UK tax charged on limited companies and certain other organisations based on the level of their taxable profits - including chargeable gains - in an accounting period.
2.
 
For example if the total entity value of Company A is $750m and its relevant EBITDA is $150m, the EBITDA multiple = $750m/$150m = 5 times.
 
2.  
 
More generally, a tax charged on a corporation.


3.
In another case if comparable EBITDA multiples for an unlisted Company B are 6, and its relevant EBITDA is $30m, the total entity value of Company B's business can be estimated on this basis as 6 x $30m = $180m.


== See also ==
== See also ==
* [[Accounting period]]
* [[Earnings multiples]]
* [[Capital allowances]]
* [[EBITDA]]
* [[Chargeable gain]]
* [[Common Consolidated Corporate Tax Base]]
* [[Company]]
* [[Corporation]]
* [[Corporation Tax Act]]
* [[Corporation Tax return]]
* [[Corporation Tax Self Assessment]]
* [[Direct tax]]
* [[Federal Corporate Income Tax]]
* [[Financial year]]
* [[Group payment arrangements]]
* [[Imputation system]]
* [[Income Tax]]
* [[Quarterly instalments]]
* [[Taxable profits]]
* [[Taxable trading profits]]
*[[UK Bank Corporation Tax surcharge]]
 
[[Category:Accounting,_tax_and_regulation]]
[[Category:Compliance_and_audit]]

Revision as of 14:58, 23 October 2014

1. A method of business valuation which is based on accounting Earnings before interest, tax, depreciation and amortisation (EBITDA) and the ratio of entity value to EBITDA of a comparable business (or a comparable group of businesses).

EBITDA mulitiple = Total value of firm ÷ EBITDA.

2. For example if the total entity value of Company A is $750m and its relevant EBITDA is $150m, the EBITDA multiple = $750m/$150m = 5 times.

3. In another case if comparable EBITDA multiples for an unlisted Company B are 6, and its relevant EBITDA is $30m, the total entity value of Company B's business can be estimated on this basis as 6 x $30m = $180m.

See also

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