.Enterprise Value to EBITDA (EV/EBITDA)
Difficulty: Intermediate
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
FedEx Corp., EBITDA calculation
USD $ in millions
| 12 months ended | May 31, 2017 | May 31, 2016 | May 31, 2015 | May 31, 2014 | May 31, 2013 | May 31, 2012 | |
|---|---|---|---|---|---|---|---|
| | Net income | ||||||
| | 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. | FedEx Corp.'s EBITDA increased from 2015 to 2016 and from 2016 to 2017. |
Enterprise Value to EBITDA Ratio, Current
FedEx 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 | |
| Union Pacific Corp. | |
| United Parcel Service Inc. | |
| EV/EBITDA, Sector | |
| Industrial Transportation | |
| EV/EBITDA, Industry | |
| Industrials | |
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
FedEx Corp., historical EV/EBITDA calculation, comparison to benchmarks
| May 31, 2017 | May 31, 2016 | May 31, 2015 | May 31, 2014 | May 31, 2013 | May 31, 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 | |||||||
| Union Pacific Corp. | |||||||
| United Parcel Service Inc. | |||||||
| EV/EBITDA, Sector | |||||||
| Industrial Transportation | |||||||
| EV/EBITDA, Industry | |||||||
| Industrials | |||||||
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. | FedEx Corp.'s EV/EBITDA ratio declined from 2015 to 2016 and from 2016 to 2017. |
