.Enterprise Value to EBITDA (EV/EBITDA)
Difficulty: Intermediate
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Cisco Systems Inc., EBITDA calculation
USD $ in millions
| 12 months ended | Jul 29, 2017 | Jul 30, 2016 | Jul 25, 2015 | Jul 26, 2014 | Jul 27, 2013 | Jul 28, 2012 | |
|---|---|---|---|---|---|---|---|
| | Net income | ||||||
| | Add: Income tax expense | ||||||
| | Earnings before tax (EBT) | ||||||
| | Add: Interest expense | ||||||
| | Earnings before interest and tax (EBIT) | ||||||
| | Add: Depreciation, amortization, and other | ||||||
| | Earnings before interest, tax, depreciation and amortization (EBITDA) |
| 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. | Cisco Systems Inc.'s EBITDA increased from 2015 to 2016 but then slightly declined from 2016 to 2017. |
Enterprise Value to EBITDA Ratio, Current
Cisco Systems Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (USD $ in millions) | |
| Enterprise value (EV) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | |
| Ratio | |
| EV/EBITDA | |
| Benchmarks | |
| EV/EBITDA, Competitors | |
| Apple Inc. | |
| Applied Materials Inc. | |
| Broadcom Ltd. | |
| HP Inc. | |
| Intel Corp. | |
| NVIDIA Corp. | |
| Qualcomm Inc. | |
| Texas Instruments Inc. | |
| EV/EBITDA, Sector | |
| Technology Hardware & Equipment | |
| EV/EBITDA, Industry | |
| Technology | |
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
Cisco Systems Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Jul 29, 2017 | Jul 30, 2016 | Jul 25, 2015 | Jul 26, 2014 | Jul 27, 2013 | Jul 28, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| | Enterprise value (EV)1 | ||||||
| | Earnings before interest, tax, depreciation and amortization (EBITDA)2 | ||||||
| Ratio | |||||||
| | EV/EBITDA3 | ||||||
| Benchmarks | |||||||
| EV/EBITDA, Competitors | |||||||
| Apple Inc. | |||||||
| Applied Materials Inc. | |||||||
| Broadcom Ltd. | |||||||
| HP Inc. | |||||||
| Intel Corp. | |||||||
| NVIDIA Corp. | |||||||
| Qualcomm Inc. | |||||||
| Texas Instruments Inc. | |||||||
| EV/EBITDA, Sector | |||||||
| Technology Hardware & Equipment | |||||||
| EV/EBITDA, Industry | |||||||
| Technology | |||||||
2017 Calculations
3 EV/EBITDA = EV ÷ EBITDA
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| EV/EBITDA | EV/EBITDA is a valuation indicator for the overall company rather than common stock. | Cisco Systems Inc.'s EV/EBITDA ratio increased from 2015 to 2016 and from 2016 to 2017. |
