Microsoft Excel LibreOffice Calc

Enterprise Value to EBITDA (EV/EBITDA)

Difficulty: Intermediate


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

Coca-Cola Co., 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 attributable to shareowners of The Coca-Cola Company 1,248  6,527  7,351  7,098  8,584 
Add: Net income attributable to noncontrolling interest 35  23  15  26  42 
Less: Income from discontinued operations, net of income taxes 101 
Add: Income tax expense 5,560  1,586  2,239  2,201  2,851 
Earnings before tax (EBT) 6,742  8,136  9,605  9,325  11,477 
Add: Interest expense 841  733  856  483  463 
Earnings before interest and tax (EBIT) 7,583  8,869  10,461  9,808  11,940 
Add: Depreciation and amortization 1,260  1,787  1,970  1,976  1,977 
Earnings before interest, tax, depreciation and amortization (EBITDA) 8,843  10,656  12,431  11,784  13,917 
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. Coca-Cola Co.'s EBITDA declined from 2015 to 2016 and from 2016 to 2017.

Enterprise Value to EBITDA Ratio, Current

Coca-Cola Co., current EV/EBITDA calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Selected Financial Data (USD $ in millions)
Enterprise value (EV) 227,016 
Earnings before interest, tax, depreciation and amortization (EBITDA) 8,843 
Ratio
EV/EBITDA 25.67
Benchmarks
EV/EBITDA, Competitors
PepsiCo Inc. 13.90
EV/EBITDA, Sector
Beverages 18.64
EV/EBITDA, Industry
Consumer Goods 12.06

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

Coca-Cola Co., 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)1 216,786  203,047  215,714  203,912  184,810 
Earnings before interest, tax, depreciation and amortization (EBITDA)2 8,843  10,656  12,431  11,784  13,917 
Ratio
EV/EBITDA3 24.51 19.05 17.35 17.30 13.28
Benchmarks
EV/EBITDA, Competitors
PepsiCo Inc. 13.65 14.13 14.91 13.75 11.15
EV/EBITDA, Sector
Beverages 18.02 16.42 16.22 15.49 12.27
EV/EBITDA, Industry
Consumer Goods 12.30 11.84 12.68 13.08 10.91

2017 Calculations

3 EV/EBITDA = EV ÷ EBITDA
= 216,786 ÷ 8,843 = 24.51

Ratio Description The company
EV/EBITDA EV/EBITDA is a valuation indicator for the overall company rather than common stock. Coca-Cola Co.'s EV/EBITDA ratio increased from 2015 to 2016 and from 2016 to 2017.