valuation-api

calculate_ev_to_ebitda

Read-onlyIdempotent

Calculate the EV/EBITDA multiple: enterprise value divided by EBITDA — the most widely used valuation multiple for comparing companies independent of capital structure, tax and depreciation policy. Formula: EV/EBITDA = Enterprise Value / EBITDA. WHEN TO USE: Use for relative valuation of cash-generative businesses against peer multiples or transaction comps; a lower multiple may indicate relative undervaluation (or justified risk). WHEN NOT TO USE: Do NOT use when EBITDA is negative or near zero, or for early-stage companies with no meaningful EBITDA — the multiple is meaningless there (use EV/Revenue). BEHAVIOUR: pure deterministic calculation — no side effects, no network or storage access; idempotent and non-destructive; identical inputs always produce identical outputs. Division by zero, non-finite inputs, or mathematically undefined combinations return an explicit error instead of a number. RETURNS: JSON object { ev_to_ebitda: number (e.g. 8.5 = 8.5x), inputs }. PARAMETERS: enterprise_value (required): Enterprise value in currency units, e.g. 10000000. Must be > 0. ebitda (required): Earnings before interest, tax, depreciation and amortisation, e.g. 1200000. Must be > 0 for a meaningful multiple.

Input Schema

TableJSON Schema

Name	Required	Description	Default
`ebitda`	Yes	Earnings before interest, tax, depreciation and amortisation, e.g. 1200000. Must be > 0 for a meaningful multiple.
`enterprise_value`	Yes	Enterprise value in currency units, e.g. 10000000. Must be > 0.

Schema Changelog

Changes observed during successful MCP inspections. Dates show when Glama detected each change.

First observedSep 5, 2026

TDQS

A4.6/5.0

Behavior5/5

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Annotations already declare readOnlyHint, idempotentHint, and destructiveHint, but the description meaningfully goes beyond them by stating the calculation is pure and deterministic, has no network or storage access, and returns an explicit error for division by zero, non-finite inputs, or mathematically undefined combinations. This gives the agent a clear failure-mode model.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Conciseness4/5

Is the description appropriately sized, front-loaded, and free of redundancy?

The description is well organized with capitalized section headers and front-loads the formula and purpose. It is slightly longer than strictly necessary because the parameter section largely mirrors the input schema, but each section still serves a clear operational purpose.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Completeness5/5

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

For a two-parameter pure calculation with no output schema, the description completely specifies inputs, formula, output shape ({ ev_to_ebitda, inputs }), and error behavior. Nothing an agent needs to correctly select and invoke the tool is missing.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Parameters3/5

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

The input schema already documents both parameters with descriptions, examples, and exclusiveMinimum constraints, so schema coverage is 100%. The description repeats this content and adds formula-level rationale for why EBITDA must be positive, but it does not materially extend parameter semantics beyond what the schema provides.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Purpose5/5

Does the description clearly state what the tool does and how it differs from similar tools?

The description names the exact verb and resource ('calculate the EV/EBITDA multiple') and gives the formula: EV/EBITDA = Enterprise Value / EBITDA. It also distinguishes this tool from calculate_ev_to_revenue by explicitly noting that EV/Revenue is the correct alternative when EBITDA is negative or near zero.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Usage Guidelines5/5

Does the description explain when to use this tool, when not to, or what alternatives exist?

Explicit 'WHEN TO USE' and 'WHEN NOT TO USE' sections state the intended context (relative valuation against peer multiples or transaction comps) and exclude cases with negative/near-zero EBITDA or early-stage companies. The description directly names the alternative tool, calculate_ev_to_revenue, leaving no ambiguity about routing.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.

All valuation-api tools Inspect

Try in Browser

RayrunBuild, deploy, and operate MCP servers without becoming an infrastructure team.ray.runAd

Glama MCP Gateway

Add one secure layer between your agents and this server.

TDQS

A4.6/5.0

Disambiguation5/5

Each tool maps to a distinct financial formula or calculation, and the when-to-use/when-not-to-use guidance cleanly separates closely related cash-flow metrics like NPV, IRR, and MOIC as well as CAPM, WACC, and DCF. There is no pair of tools that appears to perform the same operation.

Naming Consistency4/5

The overwhelming majority of tools follow a consistent calculate_<metric> snake_case pattern with descriptive names. irr_sensitivity breaks the pattern by omitting the calculate_ prefix, and mixing expanded names like cost_of_equity with abbreviations like wacc and moic is a minor deviation.

Tool Count5/5

Twelve tools is well within the ideal range for a focused financial-calculations server. Each tool covers a distinct valuation, discount-rate, or return-metric need without redundancy, so the count feels appropriately scoped.

Completeness4/5

The tool set covers the core valuation workflow: cost of equity, beta unlevering/relevering, WACC, DCF, enterprise-value multiples, and investment return metrics. It lacks a reverse equity-value calculation and an equity-side multiple like P/E, but those are workable gaps rather than severe dead ends.

Resources

Need Help?