Enterprise value/earnings before interest, taxes, depreciation and amortization (EV/EBITDA) is a widely used relative valuation indicator. Its core idea is to measure a company's ability to "create value". EV represents the total cost of purchasing all the equity of a company (including shareholders' equity and creditors' equity), while EBITDA represents the cash flow generated by the company through core business operations. This ratio eliminates the interference of different capital structures, tax policies and non-cash expenses on company valuation, and provides the feasibility of cross-industry comparison. A low EV/EBITDA multiple may imply that the market underestimates the value of the company or that investors are conservative about its future prospects; conversely, a high multiple may mean that the company is overvalued or that the market has optimistic expectations for its future growth. However, in actual application, it should be noted that a comprehensive analysis should be conducted in combination with the industry average, company historical data and other financial indicators to more accurately assess the company's value.