Enterprise Value to EBITDA (EV/EBITDA)
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Walgreens Boots Alliance Inc. pages available for free this week:
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Price to Sales (P/S) since 2005
- Analysis of Revenues
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Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Walgreens Boots Alliance Inc., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
- Net Earnings Attributable to Walgreens Boots Alliance, Inc.
- The net earnings exhibit a fluctuating trend over the six-year period. Starting at $1,932 million in 2014, net earnings rose significantly to a peak of $5,024 million in 2018 before declining to $3,982 million in 2019. This indicates variability in profitability with a notable peak followed by a decline in the latest year.
- Earnings Before Tax (EBT)
- EBT has shown growth from $3,557 million in 2014 to a high of $6,029 million in 2018, reflecting improved pre-tax profitability during these years. However, there is a marked decrease to $4,550 million in 2019, suggesting a contraction in earnings before tax in the most recent year analyzed.
- Earnings Before Interest and Tax (EBIT)
- The EBIT figures demonstrate a similar pattern to EBT, starting at $3,713 million in 2014 and increasing steadily to $6,645 million in 2018. Thereafter, EBIT declines to $5,254 million in 2019. This pattern indicates growth in operational profitability until 2018, followed by a reduction in the following year.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA follows the established trend of initial growth followed by a decline. The value climbed from $5,029 million in 2014 to $8,415 million in 2018, highlighting improved cash flow and operational efficiency. It then decreased to $7,292 million in 2019. Despite the dip, the EBITDA in 2019 remains substantially higher than in 2014, indicating overall growth over the period.
- Overall Analysis
- The financial data reveals a consistent upward trend in earnings and profitability metrics from 2014 through 2018, peaking in that year across all measured indicators. The subsequent year shows a decline in net earnings, EBT, EBIT, and EBITDA, suggesting a possible shift in operational performance or external conditions affecting profitability in 2019. Despite the decline, the metrics remain above 2014 levels, indicating long-term growth with recent challenges.
Enterprise Value to EBITDA Ratio, Current
Walgreens Boots Alliance Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | |
| Valuation Ratio | |
| EV/EBITDA | |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Costco Wholesale Corp. | |
| Target Corp. | |
| Walmart Inc. | |
Based on: 10-K (reporting date: 2019-08-31).
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
Walgreens Boots Alliance Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Aug 31, 2019 | Aug 31, 2018 | Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Enterprise value (EV)1 | |||||||
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | |||||||
| Valuation Ratio | |||||||
| EV/EBITDA3 | |||||||
| Benchmarks | |||||||
| EV/EBITDA, Competitors4 | |||||||
| Costco Wholesale Corp. | |||||||
| Target Corp. | |||||||
| Walmart Inc. | |||||||
Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).
3 2019 Calculation
EV/EBITDA = EV ÷ EBITDA
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited a fluctuating trend over the observed period. It increased substantially from 59,181 million USD in 2014 to 104,315 million USD in 2015, representing a significant rise. Subsequently, EV declined to 97,390 million USD in 2016 and continued to decrease further to 80,464 million USD in 2017. Minor recovery was noted in 2018 with an EV of 81,590 million USD, followed by a further decrease to 66,257 million USD in 2019. The overall trend indicates volatility with a peak in 2015 and a general downward movement thereafter.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA showed an upward trend from 5,029 million USD in 2014 to 7,682 million USD in 2015, reflecting improved operating profitability. This was followed by a slight decrease in 2016 to 7,502 million USD, with another decline in 2017 to 7,208 million USD. However, EBITDA rose again in 2018 to reach its highest in the period analyzed at 8,415 million USD. In 2019, EBITDA decreased to 7,292 million USD. Despite some fluctuations, EBITDA generally remained within a range of approximately 7,200 to 8,400 million USD after 2015, suggesting moderate stability in operating earnings.
- EV/EBITDA Ratio
- The EV/EBITDA ratio started at 11.77 in 2014 and increased to a high of 13.58 in 2015, indicating a relatively higher valuation compared to earnings at that time. The ratio then generally declined each year, falling to 12.98 in 2016, 11.16 in 2017, 9.7 in 2018, and reaching 9.09 in 2019. This downward trend in the EV/EBITDA ratio suggests that the market valuation of the enterprise relative to its earnings before interest, taxes, depreciation, and amortization decreased over the period, potentially signaling a more attractive valuation in later years or diminishing market expectations.