what is the rule of thumb for debt to ebitda 
it depends on the business and the industry it operates in some analysts might say 3 0 is the limit while others might go as high as or higher than 4 5 or 5 0 the bottom linethe debt to ebitda ratio tells you how much income is available to pay debts before taxes depreciation and amortization are considered the ratio is used by some analysts but since certain expenses are not accounted for before the calculation the metric is limited because it doesn t demonstrate the ability to pay debts from earnings after all expenses are paid 