Stock Analysis on Net
Stock Analysis on Net
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Illinois Tool Works Inc. (NYSE:ITW)

Enterprise Value to EBITDA (EV/EBITDA)

Intermediate level

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

Illinois Tool Works Inc., EBITDA calculation

US$ in millions

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12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net income 2,521  2,563  1,687  2,035  1,899 
Add: Income tax expense 767  831  1,583  873  820 
Earnings before tax (EBT) 3,288  3,394  3,270  2,908  2,719 
Add: Interest expense 221  257  260  237  226 
Earnings before interest and tax (EBIT) 3,509  3,651  3,530  3,145  2,945 
Add: Depreciation 267  272  256  246  244 
Earnings before interest, tax, depreciation and amortization (EBITDA) 3,776  3,923  3,786  3,391  3,189 

Based on: 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12).

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. Illinois Tool Works Inc.’s EBITDA increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.

Enterprise Value to EBITDA Ratio, Current

Illinois Tool Works Inc., current EV/EBITDA calculation, comparison to benchmarks

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Selected Financial Data (US$ in millions)
Enterprise value (EV) 70,709 
Earnings before interest, tax, depreciation and amortization (EBITDA) 3,776 
Valuation Ratio
EV/EBITDA 18.73
Benchmarks
EV/EBITDA, Competitors1
Caterpillar Inc. 11.85
EV/EBITDA, Sector
Industrial Engineering 13.62
EV/EBITDA, Industry
Industrials 15.81

Based on: 10-K (filing date: 2020-02-14).

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

Illinois Tool Works Inc., historical EV/EBITDA calculation, comparison to benchmarks

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 65,683  53,197  61,033  49,720  37,759 
Earnings before interest, tax, depreciation and amortization (EBITDA)2 3,776  3,923  3,786  3,391  3,189 
Valuation Ratio
EV/EBITDA3 17.39 13.56 16.12 14.66 11.84
Benchmarks
EV/EBITDA, Competitors4
Caterpillar Inc. 9.66 9.54 16.29 23.90 10.87
EV/EBITDA, Sector
Industrial Engineering 11.66 10.59 16.24 19.47 11.20
EV/EBITDA, Industry
Industrials 15.05 14.86 14.99 13.09 11.86

Based on: 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-15), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-02-12).

1 See details »

2 See details »

3 2019 Calculation
EV/EBITDA = EV ÷ EBITDA
= 65,683 ÷ 3,776 = 17.39

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. Illinois Tool Works Inc.’s EV/EBITDA ratio decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.