Microsoft Excel LibreOffice Calc

Apple Inc. (AAPL)


Enterprise Value to EBITDA (EV/EBITDA)

Difficulty: Intermediate


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

Apple Inc., EBITDA calculation

USD $ in millions

Microsoft Excel LibreOffice Calc
12 months ended Sep 29, 2018 Sep 30, 2017 Sep 24, 2016 Sep 26, 2015 Sep 27, 2014 Sep 28, 2013
Net income 59,531  48,351  45,687  53,394  39,510  37,037 
Add: Income tax expense 13,372  15,738  15,685  19,121  13,973  13,118 
Earnings before tax (EBT) 72,903  64,089  61,372  72,515  53,483  50,155 
Add: Interest expense 3,240  2,323  1,456  733  384  136 
Earnings before interest and tax (EBIT) 76,143  66,412  62,828  73,248  53,867  50,291 
Add: Depreciation and amortization 10,903  10,157  10,505  11,257  7,946  6,757 
Earnings before interest, tax, depreciation and amortization (EBITDA) 87,046  76,569  73,333  84,505  61,813  57,048 

Based on: 10-K (filing date: 2018-11-05), 10-K (filing date: 2017-11-03), 10-K (filing date: 2016-10-26), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-27), 10-K (filing date: 2013-10-30).

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. Apple Inc.’s EBITDA increased from 2016 to 2017 and from 2017 to 2018.

Enterprise Value to EBITDA Ratio, Current

Apple Inc., current EV/EBITDA calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Selected Financial Data (USD $ in millions)
Enterprise value (EV) 934,993 
Earnings before interest, tax, depreciation and amortization (EBITDA) 87,046 
Ratio
EV/EBITDA 10.74
Benchmarks
EV/EBITDA, Competitors
Applied Materials Inc. 7.40
Broadcom Inc. 12.80
Cisco Systems Inc. 13.19
HP Inc. 8.00
Intel Corp. 6.74
NVIDIA Corp. 19.60
Qualcomm Inc. 30.90
Texas Instruments Inc. 13.07
EV/EBITDA, Sector
Technology Hardware & Equipment 10.86
EV/EBITDA, Industry
Technology 13.71

Based on: 10-K (filing date: 2018-11-05).

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.


Enterprise Value to EBITDA Ratio, Historical

Apple Inc., historical EV/EBITDA calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Sep 29, 2018 Sep 30, 2017 Sep 24, 2016 Sep 26, 2015 Sep 27, 2014 Sep 28, 2013
Selected Financial Data (USD $ in millions)
Enterprise value (EV)1 1,004,807  927,168  636,239  687,831  626,671  448,713 
Earnings before interest, tax, depreciation and amortization (EBITDA)2 87,046  76,569  73,333  84,505  61,813  57,048 
Ratio
EV/EBITDA3 11.54 12.11 8.68 8.14 10.14 7.87
Benchmarks
EV/EBITDA, Competitors
Applied Materials Inc. 6.24 12.35 13.76 10.35 14.94 23.46
Broadcom Inc. 12.21 16.58 34.17 15.64 27.64 15.68
Cisco Systems Inc. 12.07 7.81 7.66 6.90 7.52 6.72
HP Inc. 9.20 8.87 6.18 3.24 6.93 5.58
Intel Corp. 7.11 7.74 8.42 5.70 6.62
NVIDIA Corp. 40.89 26.29 14.36 9.05 8.60
Qualcomm Inc. 28.47 12.74 10.77 10.79 11.15 11.14
Texas Instruments Inc. 13.08 14.42 12.95 9.86 12.09
EV/EBITDA, Sector
Technology Hardware & Equipment 11.50 11.29 9.37 7.71 9.30
EV/EBITDA, Industry
Technology 13.33 14.11 12.04 10.47 10.40

Based on: 10-K (filing date: 2018-11-05), 10-K (filing date: 2017-11-03), 10-K (filing date: 2016-10-26), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-27), 10-K (filing date: 2013-10-30).

2018 Calculations

3 EV/EBITDA = EV ÷ EBITDA
= 1,004,807 ÷ 87,046 = 11.54

Ratio Description The company
EV/EBITDA EV/EBITDA is a valuation indicator for the overall company rather than common stock. Apple Inc.’s EV/EBITDA ratio increased from 2016 to 2017 but then slightly declined from 2017 to 2018.