The EV/EBITDA of Seven Generations Energy Ltd. is 6.61
EV/EBITDA is enterprise value divided by earnings before interest, tax, depreciation, and amortization. It is a measure of how expensive a stock is and is more frequently valid for comparisons across companies than the price to earnings ratio. It measures the price (in the form of enterprise value) an investor pays for the benefit of the company’s cash flow (in the form of EBITDA).
= enterprise value / EBITDA
Price to earnings ratios are impacted by a company's choice of capital structure - companies which raise money via debt will have lower P/Es (and therefore look cheaper) than companies that raise an equivalent amount of money by issuing shares, even though the two companies might have equivalent enterprise values. A sample case is when a company with debt were to raise money by issuing shares of stock, and then used the money to pay off the debt, this company's P/E ratio would shoot up because of the increased number of shares - although nothing about the fundamental value of the business has changed. EV / EBITDA is unaffected by capital structure as enterprise value includes the value of debt, and EBITDA is available to all investors (debt and equity) as it excludes interest payments on that debt. It is ideal for analysts and potential investors looking to compare companies within the same industry.
Seven Generations Energy Ltd., together with its subsidiary, engages in the development of oil and natural gas properties in Canada. The company holds interests in the Kakwa River project, a natural gas property covering approximately 528,000 net acres located in the Kakwa area of northwest Alberta. Seven Generations Energy Ltd. was founded in 2001 and is headquartered in Calgary, Canada.