Sterling Plc EV/EBITDA

What is the EV/EBITDA of Sterling Plc?

The EV/EBITDA of Sterling Energy Plc is N/A

What is the definition of EV/EBITDA?



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.

EV/EBITDA of companies in the Energy sector on LSE compared to Sterling Plc

What does Sterling Plc do?

Sterling Energy plc, together with its subsidiaries, operates as an upstream oil and gas company primarily in Africa and the Middle East. It is involved in the appraisal, exploration, development, and production of oil and gas. The company holds 34% interest in an exploration project covering approximately 22,840 square kilometers located in Somaliland. The company was incorporated in 1983 and is headquartered in London, the United Kingdom.

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