General Electric Co. (GE)

Enterprise Value to EBITDA (EV/EBITDA)

Difficulty: Intermediate

General Electric Co., EBITDA calculation

USD $ in millions

	12 months ended	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Net earnings (loss) attributable to the Company
	Add: Net income attributable to noncontrolling interest
	Less: Loss from discontinued operations, net of taxes
	Add: Income tax expense
	Earnings before tax (EBT)
	Add: Interest and other financial charges
	Earnings before interest and tax (EBIT)
	Add: Depreciation and amortization of property, plant and equipment
	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.	General Electric Co.'s EBITDA increased from 2015 to 2016 but then declined significantly from 2016 to 2017.

General Electric Co., 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
3M Co.
Danaher Corp.
Honeywell International Inc.
EV/EBITDA, Sector
General Industrials
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.

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

		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
	Earnings before interest, tax, depreciation and amortization (EBITDA)²
	Ratio
	EV/EBITDA³
	Benchmarks
	EV/EBITDA, Competitors
	3M Co.
	Danaher Corp.
	Honeywell International Inc.
	EV/EBITDA, Sector
	General Industrials
	EV/EBITDA, Industry
	Industrials

2017 Calculations

³ EV/EBITDA = EV ÷ EBITDA
= hidden ÷ hidden = hidden

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

	General Electric Co.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

	All companies
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality