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If EV/Sales = 2x and EV/EBITDA = 8x, what's the EBITDA margin?
Answer
EBITDA Margin = EBITDA / Sales = (EV/Sales) ÷ (EV/EBITDA) = 2 / 8 = 25%.
Why interviewers ask this
Useful relationship: EBITDA margin = (EV/Sales) ÷ (EV/EBITDA). This lets you quickly infer margin from trading multiples — a fast sanity check during interviews.
marginsmultiples