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Enterprise Value to EBITDA (EV/EBITDA)
Difficulty: Intermediate
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
International Business Machines Corp., EBITDA calculation
USD $ in millions
Based on: 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28), 10-K (filing date: 2016-02-23), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-25).
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. | International Business Machines Corp.’s EBITDA declined from 2015 to 2016 and from 2016 to 2017. |
Enterprise Value to EBITDA Ratio, Current
International Business Machines 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 | |
Adobe Inc. | ![]() |
Alphabet Inc. | ![]() |
Facebook Inc. | ![]() |
Microsoft Corp. | ![]() |
Oracle Corp. | ![]() |
salesforce.com inc. | ![]() |
EV/EBITDA, Sector | |
Software & Computer Services | ![]() |
EV/EBITDA, Industry | |
Technology | ![]() |
Based on: 10-K (filing date: 2018-02-27).
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
International Business Machines Corp., historical EV/EBITDA calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28), 10-K (filing date: 2016-02-23), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-25).
2017 Calculations
3 EV/EBITDA = EV ÷ EBITDA
= ÷
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Ratio | Description | The company |
---|---|---|
EV/EBITDA | EV/EBITDA is a valuation indicator for the overall company rather than common stock. | International Business Machines Corp.’s EV/EBITDA ratio increased from 2015 to 2016 but then slightly declined from 2016 to 2017. |