Enterprise Value multiples, i.e. the multiples expressing the Value of Capital employed, are multiples of operating balances before subtracting Interest expense. NOPAT (net Operating profit after tax) is the best denominator, i.e. EBIT less corporate Income taxes. However, the EBIT and EBITDA multiples are most commonly used in the financial community.

(See Chapter 32 Capital structure and the theory of perfect capital markets of the Vernimmen)

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