A company has EV/EBITDA = 9x, Net Debt/EBITDA = 3x, and Equity Value = $360M. What's net debt?

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IBPrep · Accepted Answer

EV = Equity + Net Debt, so EV/EBITDA = (Equity + ND)/EBITDA = 9 and ND/EBITDA = 3. Debt is therefore 3/9 of EV, so Equity is 6/9 of EV. EV = $360M / (6/9) = $540M. Net Debt = (3/9) x $540M = $180M.

A company has EV/EBITDA = 9x, Net Debt/EBITDA = 3x, and Equity Value = $360M. What's net debt?

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