Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Kraft Foods Group Inc., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
The annual financial data reveals notable fluctuations in key earnings metrics over the three-year period ending in 2014.
- Net Earnings
- Net earnings increased significantly from 1,642 million US dollars in 2012 to 2,715 million US dollars in 2013, reflecting a strong growth phase. However, in 2014, net earnings declined sharply to 1,043 million US dollars, indicating a substantial drop and potential challenges faced during that year.
- Earnings Before Tax (EBT)
- EBT followed a similar trend, rising from 2,453 million US dollars in 2012 to 4,090 million US dollars in 2013, marking impressive improvement in pre-tax profitability. This was followed by a pronounced reduction to 1,406 million US dollars in 2014, consistent with the decline observed in net earnings.
- Earnings Before Interest and Tax (EBIT)
- EBIT demonstrated growth from 2,711 million US dollars in 2012 to 4,591 million US dollars in 2013, indicating enhanced operational profitability. The subsequent decrease to 1,890 million US dollars in 2014 represents a notable contraction in operational earnings, though less severe than the decline in net earnings and EBT.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- EBITDA rose markedly from 3,139 million US dollars in 2012 to 4,984 million US dollars in 2013, highlighting strong earnings before non-cash charges. The drop to 2,275 million US dollars in 2014, while significant, remains above the 2012 level, suggesting some resilience in earnings before depreciation and amortization despite overall profit pressures.
In summary, the data shows a period of robust earnings growth from 2012 to 2013 across all profitability metrics, followed by a substantial decline in 2014. The sharp decrease in net earnings and EBT in 2014 suggests possible issues impacting profitability after tax, while EBITDA's relatively smaller decrease may indicate cost control measures or stability in core operational performance despite overall earnings downturn.
Enterprise Value to EBITDA Ratio, Current
Kraft Foods Group Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 59,575) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 2,275) |
| Valuation Ratio | |
| EV/EBITDA | 26.19 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| lululemon athletica inc. | 7.01 |
| Nike Inc. | 1,469.12 |
Based on: 10-K (reporting date: 2014-12-27).
1 Click competitor name to see calculations.
If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
Kraft Foods Group Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | ||
|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||
| Enterprise value (EV)1 | 46,470) | 41,145) | 39,370) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 2,275) | 4,984) | 3,139) | |
| Valuation Ratio | ||||
| EV/EBITDA3 | 20.43 | 8.26 | 12.54 | |
| Benchmarks | ||||
| EV/EBITDA, Competitors4 | ||||
| lululemon athletica inc. | — | — | — | |
| Nike Inc. | — | — | — | |
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
3 2014 Calculation
EV/EBITDA = EV ÷ EBITDA
= 46,470 ÷ 2,275 = 20.43
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value demonstrated an upward trend over the three-year period, increasing from 39,370 million US dollars in 2012 to 46,470 million US dollars in 2014. This increase suggests a growth in the company's market valuation or overall business size during these years.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA initially rose significantly from 3,139 million US dollars in 2012 to 4,984 million US dollars in 2013, indicating improved operating performance. However, in 2014, EBITDA declined sharply to 2,275 million US dollars, suggesting a deterioration in operating profitability during that year.
- EV/EBITDA Ratio
- The EV/EBITDA ratio decreased markedly from 12.54 in 2012 to 8.26 in 2013, reflecting improved valuation relative to earnings, likely driven by the growth in EBITDA outpacing the increase in enterprise value. In 2014, the ratio surged to 20.43, primarily due to the steep decline in EBITDA while enterprise value continued to rise, indicating a potential overvaluation or a weakening in earnings relative to the company's market value.