Microsoft Excel LibreOffice Calc

Enterprise Value to EBITDA (EV/EBITDA)

Difficulty: Intermediate


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

eBay Inc., EBITDA calculation

USD $ in millions

Microsoft Excel LibreOffice Calc
12 months ended Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Net income (loss) (1,016) 7,266  1,725  46  2,856 
Less: Loss from discontinued operations, net of income taxes (4) (19) (222)
Add: Income tax expense 3,288  (3,634) 459  3,485  610 
Earnings before tax (EBT) 2,276  3,651  2,406  3,531  3,466 
Add: Interest expense 292  225  144  123  100 
Earnings before interest and tax (EBIT) 2,568  3,876  2,550  3,654  3,566 
Add: Depreciation and amortization 676  682  687  1,490  1,400 
Earnings before interest, tax, depreciation and amortization (EBITDA) 3,244  4,558  3,237  5,144  4,966 
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. eBay Inc.'s EBITDA increased from 2015 to 2016 but then slightly declined from 2016 to 2017 not reaching 2015 level.

Enterprise Value to EBITDA Ratio, Current

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

Microsoft Excel LibreOffice Calc
Selected Financial Data (USD $ in millions)
Enterprise value (EV) 37,807 
Earnings before interest, tax, depreciation and amortization (EBITDA) 3,244 
Ratio
EV/EBITDA 11.65
Benchmarks
EV/EBITDA, Competitors
Amazon.com Inc. 57.74
Costco Wholesale Corp. 18.07
Home Depot Inc. 14.81
Lowe's Cos. Inc. 12.56
Netflix Inc. 20.08
Target Corp. 7.88
TJX Cos. Inc. 13.28
Walmart Inc. 11.84
EV/EBITDA, Sector
General Retailers 20.09
EV/EBITDA, Industry
Consumer Services 14.91

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

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

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Enterprise value (EV)1 47,034  36,629  28,866  63,477  63,974 
Earnings before interest, tax, depreciation and amortization (EBITDA)2 3,244  4,558  3,237  5,144  4,966 
Ratio
EV/EBITDA3 14.50 8.04 8.92 12.34 12.88
Benchmarks
EV/EBITDA, Competitors
Amazon.com Inc. 43.74 31.40 33.08 33.45 41.58
Costco Wholesale Corp. 12.63 13.27 13.49 12.08 12.30
Home Depot Inc. 12.90 13.23 12.90 11.11 11.74
Lowe's Cos. Inc. 11.43 12.18 12.79 10.47 9.60
Netflix Inc. 18.03 11.80 10.59 8.22 9.62
Target Corp. 5.59 7.47 9.21 7.85 8.09
TJX Cos. Inc. 11.16 11.83 11.14 10.70 9.10
Walmart Inc. 7.91 7.75 8.40 8.37 8.16
EV/EBITDA, Sector
General Retailers 15.92 12.72 12.34 10.93 10.95
EV/EBITDA, Industry
Consumer Services 13.17 11.89 11.41 11.20 10.78

2017 Calculations

3 EV/EBITDA = EV ÷ EBITDA
= 47,034 ÷ 3,244 = 14.50

Ratio Description The company
EV/EBITDA EV/EBITDA is a valuation indicator for the overall company rather than common stock. eBay Inc.'s EV/EBITDA ratio declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.