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Procter & Gamble Co. (PG) | Enterprise Value to EBITDA (EV/EBITDA)

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Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)

Procter & Gamble Co., EBITDA calculation

USD $ in millions

12 months ended	Jun 30, 2011	Jun 30, 2010	Jun 30, 2009	Jun 30, 2008	Jun 30, 2007	Jun 30, 2006
Net earnings	11,797	12,736	13,436	12,075	10,340	8,684
Add: Interest expense	831	946	1,358	1,467	1,304	1,119
Add: Income tax expense (benefit)	3,392	4,101	4,032	4,003	4,370	3,729
Earnings before interest and tax (EBIT)	16,020	17,783	18,826	17,545	16,014	13,532
Add: Depreciation and amortization	2,838	3,108	3,082	3,166	3,130	2,627
Earnings before interest, tax, depreciation and amortization (EBITDA)	18,858	20,891	21,908	20,711	19,144	16,159

Item	Description	The company
EBITDA	To calculate EBITDA analysts start with net earnings. To that earnings number, interest, taxes, depreciation, and amortization are added. EBITDA as a pre-interest number is a flow to all providers of capital.	Procter & Gamble Co.'s EBITDA declined from 2009 to 2010 and from 2010 to 2011.

Procter & Gamble Co., current EV/EBITDA

	Procter & Gamble Co.	Consumer Goods
Selected Financial Data (USD $ in millions)
Enterprise value (EV)	202,274
Earnings before interest, tax, depreciation and amortization (EBITDA)	18,858
Ratio
EV/EBITDA	10.73	9.55

If company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.

Otherwise, if company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.

Procter & Gamble Co., EV/EBITDA calculation

	Jun 30, 2011	Jun 30, 2010	Jun 30, 2009	Jun 30, 2008	Jun 30, 2007	Jun 30, 2006
Selected Financial Data (USD $ in millions)
Enterprise value (EV)	191,613	198,352	186,660	249,956	233,177	226,044
Earnings before interest, tax, depreciation and amortization (EBITDA)	18,858	20,891	21,908	20,711	19,144	16,159
EV/EBITDA, Comparison to Industry
Procter & Gamble Co.¹	10.16	9.49	8.52	12.07	12.18	13.99
Industry, Consumer Goods	9.43	9.33	10.81	7.29	9.69	–

2011 Calculations

¹ EV/EBITDA = EV ÷ EBITDA
= 191,613 ÷ 18,858 = 10.16

Ratio	Description	The company
EV/EBITDA	EV/EBITDA is a valuation indicator for the overall company rather than common stock.	Procter & Gamble Co.'s EV/EBITDA ratio increased from 2009 to 2010 and from 2010 to 2011.