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Ford Motor Co. (F)

Enterprise Value to EBITDA (EV/EBITDA)

Difficulty: Intermediate

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

Ford Motor Co., EBITDA calculation

USD $ in millions

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12 months ended Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Net income attributable to Ford Motor Company 7,602  4,596  7,373  3,187  7,155 
Add: Net income attributable to noncontrolling interest 26  11  (2) (1) (7)
Add: Income tax expense 520  2,189  2,881  1,156  (147)
Earnings before tax (EBT) 8,148  6,796  10,252  4,342  7,001 
Add: Interest expense on Automotive debt 1,133  894  773  797  829 
Earnings before interest and tax (EBIT) 9,281  7,690  11,025  5,139  7,830 
Add: Depreciation and tooling amortization 9,122  9,023  7,993  7,385  6,504 
Add: Other amortization (669) (306) (27) 38  (48)
Earnings before interest, tax, depreciation and amortization (EBITDA) 17,734  16,407  18,991  12,562  14,286 

Based on: 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-13), 10-K (filing date: 2014-02-18).

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. Ford Motor Co.'s EBITDA declined from 2015 to 2016 but then increased from 2016 to 2017 not reaching 2015 level.

Enterprise Value to EBITDA Ratio, Current

Ford Motor Co., current EV/EBITDA calculation, comparison to benchmarks

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Selected Financial Data (USD $ in millions)
Enterprise value (EV) 101,127 
Earnings before interest, tax, depreciation and amortization (EBITDA) 17,734 
Ratio
EV/EBITDA 5.70
Benchmarks
EV/EBITDA, Competitors
General Motors Co. 4.91
EV/EBITDA, Sector
Automobiles & Parts 5.24
EV/EBITDA, Industry
Consumer Goods 12.05

Based on: 10-K (filing date: 2018-02-08).

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

Ford Motor Co., historical EV/EBITDA calculation, comparison to benchmarks

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Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Enterprise value (EV)1 104,620  107,096  96,895  152,530  138,848 
Earnings before interest, tax, depreciation and amortization (EBITDA)2 17,734  16,407  18,991  12,562  14,286 
Ratio
EV/EBITDA3 5.90 6.53 5.10 12.14 9.72
Benchmarks
EV/EBITDA, Competitors
General Motors Co. 5.28 4.97 5.24 6.47 4.22
EV/EBITDA, Sector
Automobiles & Parts 5.54 5.62 5.17 9.39 6.83
EV/EBITDA, Industry
Consumer Goods 12.30 11.84 12.68 13.08 10.91

Based on: 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-13), 10-K (filing date: 2014-02-18).

1 See Details »

2 See Details »

2017 Calculations

3 EV/EBITDA = EV ÷ EBITDA
= 104,620 ÷ 17,734 = 5.90

Ratio Description The company
EV/EBITDA EV/EBITDA is a valuation indicator for the overall company rather than common stock. Ford Motor Co.'s EV/EBITDA ratio increased from 2015 to 2016 but then slightly declined from 2016 to 2017.