Why can't you use Equity Value / EBITDA as a multiple?

You can't use Equity Value / EBITDA as a multiple because you are comparing apples to oranges.

This is because EBITDA is available to all investors in the company (both equity and debt holders). Equity Value, on the other hand, is only available to equity investors, so it doesn't make sense to pair them together.

Instead, we use Enterprise Value / EBITDA as a multiple because this allows us to compare apples to apples because both the numerator and denominator are both available to all investors in the company.