Enterprise Value to EBITDA (EV/EBITDA)
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- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2006
- Price to Operating Profit (P/OP) since 2006
- Analysis of Revenues
- Analysis of Debt
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Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Mastercard Inc., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Net Income
- The net income demonstrates an overall upward trend across the five-year span. Starting at 5,859 million US dollars in 2018, the figure peaked at 8,118 million in 2019, experienced a decline to 6,411 million in 2020, then rose steadily to reach 9,930 million by the end of 2022. The dip in 2020 interrupts an otherwise strong growth pattern, likely reflecting an external or company-specific challenge during that year.
- Earnings Before Tax (EBT)
- EBT similarly shows growth from 7,204 million in 2018 to 11,732 million in 2022. The trend mirrors that of net income, with a noticeable reduction in 2020 to 7,760 million following a peak in 2019. The recovery after 2020 is significant, indicating a return to or improvement beyond prior profitability levels.
- Earnings Before Interest and Tax (EBIT)
- EBIT follows a comparable trajectory, increasing from 7,390 million in 2018 to 12,203 million in 2022. Again, the data highlights a drop in 2020 to 8,140 million from the 2019 high. Post-2020 figures show a strong recovery and consistent improvement, underlining operational resilience and enhanced earning power over time.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- EBITDA trends upward from 7,849 million in 2018 to 12,953 million in 2022, with a similar pattern of increase until 2019, a decline in 2020 to 8,720 million, and subsequent growth. The increasing EBITDA indicates expanding operational cash flow potential, despite the disruption seen in 2020.
- Overall Observations
- All financial metrics exhibit strong growth trajectories with a common dip in 2020, likely attributable to exceptional external conditions during that year. Recovery across all indicators is robust and consistent, reflecting effective management and operational strategies post-2020. The growth beyond pre-2020 levels suggests improved profitability and financial health heading into 2022.
Enterprise Value to EBITDA Ratio, Current
Mastercard Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | |
| Valuation Ratio | |
| EV/EBITDA | |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Accenture PLC | |
| Adobe Inc. | |
| Cadence Design Systems Inc. | |
| CrowdStrike Holdings Inc. | |
| Fair Isaac Corp. | |
| International Business Machines Corp. | |
| Intuit Inc. | |
| Microsoft Corp. | |
| Oracle Corp. | |
| Palantir Technologies Inc. | |
| Palo Alto Networks Inc. | |
| Salesforce Inc. | |
| ServiceNow Inc. | |
| Synopsys Inc. | |
| Workday Inc. | |
| EV/EBITDA, Sector | |
| Software & Services | |
| EV/EBITDA, Industry | |
| Information Technology | |
Based on: 10-K (reporting date: 2022-12-31).
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
Mastercard Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | ||||||
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | ||||||
| Valuation Ratio | ||||||
| EV/EBITDA3 | ||||||
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| EV/EBITDA, Sector | ||||||
| Software & Services | ||||||
| EV/EBITDA, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
3 2022 Calculation
EV/EBITDA = EV ÷ EBITDA
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value showed a strong upward trend from 2018 through 2021, increasing from approximately $222.6 billion to $365.1 billion. However, in 2022, there was a slight decline to $357.2 billion, indicating a modest decrease after several years of growth.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- The EBITDA figures displayed overall growth during the analyzed period, rising from about $7.8 billion in 2018 to $12.95 billion in 2022. There was a notable dip in 2020 to $8.7 billion, likely reflecting challenges during that year, but strong recovery was observed in subsequent years, reaching the highest level in 2022.
- EV/EBITDA Ratio
- The EV/EBITDA ratio started at 28.36 in 2018 and increased sharply to 38.83 in 2020, primarily due to the decrease in EBITDA despite rising enterprise value. Following 2020, the ratio declined steadily to 31.84 in 2021 and further to 27.57 in 2022, suggesting that the valuation relative to earnings became more favorable as EBITDA improved and enterprise value slightly contracted.
- Overall Insights
- The data indicate resilient financial performance with strong EBITDA growth after a temporary downturn in 2020. The enterprise value trend suggests increased market valuation until 2021, followed by a mild correction. The decreasing EV/EBITDA ratio post-2020 implies improving valuation metrics, reflecting enhanced profitability and possibly a more attractive investment profile.