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Finance Glossary

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Over 700 finance terms, Shmooped to perfection.

Debt-to-EBITDA

Definition:

Debt-to-EBITDA is a ratio that compares what a company owes in debts to the EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).

This number is used by bankers and investors to see how leveraged a company is. The higher the number, the more likely it is that a company will struggle to pay up its debt. Debt of more than 3 or 4 times cash flow is considered very high on most planets.