.Enterprise Value to EBITDA (EV/EBITDA)
Difficulty: Intermediate
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Costco Wholesale Corp., EBITDA calculation
USD $ in millions
| 12 months ended | Sep 3, 2017 | Aug 28, 2016 | Aug 30, 2015 | Aug 31, 2014 | Sep 1, 2013 | Sep 2, 2012 | |
|---|---|---|---|---|---|---|---|
| | Net income attributable to Costco | ||||||
| | Add: Net income attributable to noncontrolling interest | ||||||
| | Add: Income tax expense | ||||||
| | Earnings before tax (EBT) | ||||||
| | Add: Interest expense | ||||||
| | Earnings before interest and tax (EBIT) | ||||||
| | Add: Depreciation and amortization | ||||||
| | 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. | Costco Wholesale Corp.'s EBITDA increased from 2015 to 2016 and from 2016 to 2017. |
Enterprise Value to EBITDA Ratio, Current
Costco Wholesale Corp., 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 | |
| Amazon.com Inc. | |
| eBay Inc. | |
| Home Depot Inc. | |
| Lowe's Cos. Inc. | |
| Netflix Inc. | |
| Target Corp. | |
| TJX Cos. Inc. | |
| Walmart Inc. | |
| EV/EBITDA, Sector | |
| General Retailers | |
| EV/EBITDA, Industry | |
| Consumer Services | |
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
Costco Wholesale Corp., historical EV/EBITDA calculation, comparison to benchmarks
| Sep 3, 2017 | Aug 28, 2016 | Aug 30, 2015 | Aug 31, 2014 | Sep 1, 2013 | Sep 2, 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 | |||||||
| Amazon.com Inc. | |||||||
| eBay Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe's Cos. Inc. | |||||||
| Netflix Inc. | |||||||
| Target Corp. | |||||||
| TJX Cos. Inc. | |||||||
| Walmart Inc. | |||||||
| EV/EBITDA, Sector | |||||||
| General Retailers | |||||||
| EV/EBITDA, Industry | |||||||
| Consumer Services | |||||||
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. | Costco Wholesale Corp.'s EV/EBITDA ratio declined from 2015 to 2016 and from 2016 to 2017. |
