Would a company with a capital lease have a higher or lower EV / EBITDA multiple compared to an operating lease? (1 min)

A company with a capital lease would have a lower EBITDA multiple. A capital lease involves paying interest and principal repayments, which are both cash flows that happen below EBITDA. EBITDA would be higher as a result, and since EBITDA is in the denominator of EV / EBITDA, the multiple would be lower.

An operating lease would have a higher EBITDA multiple. An operating lease involves paying rent, which is an expense that is above EBITDA. This would make EBITDA lower and EV / EBITDA higher.