Why is EV paired with EBITDA rather than net income?
- A Both are before interest, so the capital providers they represent are consistent
- B EBITDA is larger
- C Net income is unreliable
- D EBITDA includes taxes
Answer
Both are before interest, so the capital providers they represent are consistent
Pairing enterprise value with a post-interest measure such as net income mismatches numerator and denominator, which is a classic interview trap.





