Leasing changes both sides of the comparison
Under the main lessee model, IFRS 16 recognises a right-of-use asset and lease liability; the official overview also describes exemptions for short-term leases and low-value assets.[99](#source-cv-ifrs16) Some expense appears through depreciation and interest, so familiar EBITDA may look different from a model treating the payment as an operating expense. The real obligation to use the premises and pay for them does not disappear.
If analytical EV includes lease liabilities, the denominator must be consistent with that approach. If a company presents an additional measure after lease payments, do not mix it without explanation with EV and EBITDA of another definition. The important point is consistent economic perimeter, not one uniquely correct abbreviation. NYU’s educational treatment of multiples states the same consistency principle.[96](#source-cv-pricing)
Why the same value does not produce the same flow
Two fictional enterprises have EV of 600 million roubles and EBITDA of 100 million. Both ratios are six. For a separate cash illustration, assume no other differences: taxes under the model are 15 million and the increase in working-capital needs is 5. The first spends 20 million on maintaining assets; the second spends 50 million.
After those stated needs, the conditional remainder is 60 million and 30 million respectively. This is a simplified cash reconciliation, not a universal FCFF formula from EBITDA: actual taxes, interest, leases and other adjustments require a detailed bridge. The example only shows that identical EBITDA can coexist with very different necessary investment.
Maintenance investment is not depreciation
Depreciation allocates historically recognised cost under accounting rules. Replacing an asset happens at a future price and another time. Inflation, technology requirements and underinvestment can increase cash need relative to accounting expense. The reverse is also possible, so capital expenditure cannot automatically be set equal to depreciation in every future year.
Separating maintenance from growth investment is usually an analytical judgement. A repair can both extend useful life and increase productivity. A company may not disclose the needed split. In that case, show several supported cases rather than call everything expansion and remove it from recurring costs.
How to test a comparison
Rebuild the bridge from the reported measure to EBITDA, then from EBITDA to cash needs. Mark costs management excludes as unusual: do they recur every year? Review capital-expenditure history, equipment age and future-period obligations. One year of savings on replacement does not prove a durable improvement in return.
Reconcile leases separately: liability in the numerator, expenses in the denominator and actual payments in the cash bridge. Several approaches are acceptable if each is labelled and not used simultaneously for double counting. Compare not only the ratio but also which costs remain outside it.
The result is an explanation of differences, not an automatic preference for the company with lower EV/EBITDA. Capital intensity, the lease model and adjustment quality need separate analysis. The educational example does not establish normal industry values or promise that the stated remainder will be paid to owners.
Check deferred replacement
For maintenance investment, investigate accumulated need, not only the current amount. Small spending in one year may mean young assets, a recently completed replacement cycle or a temporary deferral of necessary work. These cases imply different forecasts. Establish which is supported by asset age, disclosed future purchases and planned shutdowns.
Also check whether comparable companies use the same EBITDA composition. Share-based compensation, integration costs and payments for disputed claims may be excluded under different rules. No universal acceptability is established for every adjustment: show what was excluded and why it is not a recurring cash need.
In the final table, separate metric comparison from cash comparison. The first helps explain how the market values a selected base; the second shows which resources the business still needs. They complement one another but must not silently substitute for one another.
**Related foundations:** [Market capitalisation and multiples: compare like with like](/guides/market-cap-and-multiples/); [Inventory and depreciation: when a purchase becomes an expense](/guides/inventory-and-depreciation/).