General Electric Co. (GE)

Enterprise Value to EBITDA (EV/EBITDA)

Medium level of difficulty

Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
EV to EBITDA Ratio, Current
EV to EBITDA Ratio, Historical

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

General Electric Co., EBITDA calculation

US$ in millions

12 months ended	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
Net earnings (loss) attributable to the Company	(22,355)	(5,786)	8,831	(6,126)	15,233
Add: Net income attributable to noncontrolling interest	(88)	(270)	(291)	331	112
Less: Loss from discontinued operations, net of taxes	(1,726)	(308)	(954)	(7,495)	(112)
Add: Income tax expense	583	(3,043)	(464)	6,486	1,772
Earnings before tax (EBT)	(20,134)	(8,791)	9,030	8,186	17,229
Add: Interest and other financial charges	5,059	4,869	5,025	3,463	9,482
Earnings before interest and tax (EBIT)	(15,075)	(3,922)	14,055	11,649	26,711
Add: Depreciation and amortization of property, plant and equipment	5,562	5,139	4,997	4,847	9,283
Add: Amortization of intangible assets	2,662	—	—	—	—
Earnings before interest, tax, depreciation and amortization (EBITDA)	(6,851)	1,217	19,052	16,496	35,994

Based on: 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-27).

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.	General Electric Co.’s EBITDA declined from 2016 to 2017 and from 2017 to 2018.

Enterprise Value to EBITDA Ratio, Current

General Electric Co., current EV/EBITDA calculation, comparison to benchmarks

Selected Financial Data (US$ in millions)
Enterprise value (EV)	161,084
Earnings before interest, tax, depreciation and amortization (EBITDA)	(6,851)
Valuation Ratio
EV/EBITDA	—
Benchmarks
EV/EBITDA, Competitors¹
3M Co.	12.22
Danaher Corp.	23.47
Honeywell International Inc.	14.73
EV/EBITDA, Sector
General Industrials	32.63
EV/EBITDA, Industry
Industrials	16.02

Based on: 10-K (filing date: 2019-02-26).

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

General Electric Co., historical EV/EBITDA calculation, comparison to benchmarks

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
Selected Financial Data (US$ in millions)
Enterprise value (EV)¹	154,405	196,136	308,838	372,010	497,126
Earnings before interest, tax, depreciation and amortization (EBITDA)²	(6,851)	1,217	19,052	16,496	35,994
Valuation Ratio
EV/EBITDA³	—	161.16	16.21	22.55	13.81
Benchmarks
EV/EBITDA, Competitors⁴
3M Co.	14.32	15.16	13.21	11.91	12.79
Danaher Corp.	18.47	17.93	17.88	15.88	13.67
Honeywell International Inc.	12.69	14.21	12.71	11.10	11.83
EV/EBITDA, Sector
General Industrials	30.72	22.96	15.02	16.94	13.40
EV/EBITDA, Industry
Industrials	15.02	15.26	13.29	11.89	11.61

Based on: 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-27).

¹ See details »

² See details »

³ 2018 Calculation
EV/EBITDA = EV ÷ EBITDA
= 154,405 ÷ -6,851 = —

⁴ Click competitor name to see calculations.

Valuation ratio	Description	The company
EV/EBITDA	Enterprise value to earnings before interest, tax, depreciation and amortization is a valuation indicator for the overall company rather than common stock.	General Electric Co.’s EV/EBITDA ratio increased from 2016 to 2017 but then declined significantly from 2017 to 2018.