Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
McDonald’s Corp., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The financial data reveals notable fluctuations and overall growth trends in profitability metrics over the five-year period.
- Net Income
- The net income exhibited a generally upward trajectory, increasing from 4,731 million US dollars in 2020 to a peak of 8,469 million in 2023, before slightly declining to 8,223 million in 2024. This indicates strong profit generation with some volatility in the most recent year.
- Earnings Before Tax (EBT)
- EBT followed a similar pattern to net income, rising from 6,141 million in 2020 to 10,522 million in 2023, then modestly decreasing to 10,345 million in 2024. This trend suggests consistent operational profitability before tax impacts, with a minor contraction in the final year observed.
- Earnings Before Interest and Tax (EBIT)
- EBIT showed growth from 7,359 million in 2020 to a peak of 11,883 million in 2023, maintaining close to this level in 2024 at 11,851 million. The relative stability between 2023 and 2024 points to a well-managed operational efficiency and stable earnings from core business activities.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA increased steadily from 9,110 million in 2020 to 13,861 million in 2023, with a slight increase to 13,948 million in 2024. This consistent upward trend reflects an improving ability to generate cash flows from operations, inclusive of non-cash expenses such as depreciation and amortization.
Overall, the data reflects strong financial performance with growth in key earnings metrics year-over-year until 2023, followed by a stabilization or slight decline in net income and EBT in 2024, while EBIT and EBITDA remained essentially stable or increased marginally. This pattern may indicate that despite some pressures on net profitability, underlying operational performance and cash generation capabilities remain robust.
Enterprise Value to EBITDA Ratio, Current
McDonald’s Corp., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 247,588) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 13,948) |
| Valuation Ratio | |
| EV/EBITDA | 17.75 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Airbnb Inc. | 22.12 |
| Booking Holdings Inc. | 20.24 |
| Chipotle Mexican Grill Inc. | 31.02 |
| Starbucks Corp. | 16.38 |
| EV/EBITDA, Sector | |
| Consumer Services | 19.39 |
| EV/EBITDA, Industry | |
| Consumer Discretionary | 19.38 |
Based on: 10-K (reporting date: 2024-12-31).
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
McDonald’s Corp., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 261,117) | 250,011) | 227,523) | 213,114) | 191,546) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 13,948) | 13,861) | 10,903) | 12,182) | 9,110) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 18.72 | 18.04 | 20.87 | 17.49 | 21.03 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Airbnb Inc. | 23.48 | 40.65 | 36.61 | 338.63 | — | |
| Booking Holdings Inc. | 17.99 | 19.60 | 19.20 | 45.39 | 73.17 | |
| Chipotle Mexican Grill Inc. | 32.63 | 36.37 | 29.62 | 40.00 | 79.87 | |
| Starbucks Corp. | 17.33 | 17.75 | 19.88 | 18.77 | 38.99 | |
| EV/EBITDA, Sector | ||||||
| Consumer Services | 19.62 | 20.97 | 22.11 | 25.46 | 59.23 | |
| EV/EBITDA, Industry | ||||||
| Consumer Discretionary | 20.66 | 18.14 | 19.78 | 21.32 | 29.33 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/EBITDA = EV ÷ EBITDA
= 261,117 ÷ 13,948 = 18.72
4 Click competitor name to see calculations.
The data reveals several notable trends in the company's financial performance and valuation from the end of 2020 through the end of 2024.
- Enterprise Value (EV)
- The enterprise value shows a consistent upward trajectory over the five-year period, increasing from $191,546 million at the end of 2020 to $261,117 million by the end of 2024. This steady rise suggests growing market valuation or increased capital market perception of the company's worth.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA exhibits variability but an overall positive trend. It increased significantly from $9,110 million in 2020 to a peak of $12,182 million in 2021, followed by a decline to $10,903 million in 2022. Afterwards, EBITDA rebounded to $13,861 million in 2023 and slightly increased further to $13,948 million in 2024. The fluctuations indicate periods of operational performance changes, but the long-term trend is upward.
- EV/EBITDA Ratio
- The EV/EBITDA multiple declined from 21.03 in 2020 to 17.49 in 2021, indicating that enterprise value grew at a slower pace relative to EBITDA or that EBITDA growth outpaced valuation growth, potentially suggesting improved operational profitability or more attractive valuation. However, in 2022 the ratio increased again to 20.87, implying a valuation expansion relative to EBITDA or EBITDA contraction. In 2023 and 2024, the ratio moderately decreased to 18.04 and 18.72 respectively, reflecting some stabilization in valuation multiples but remaining below the initial 2020 level.
Overall, the company’s enterprise value and EBITDA demonstrate growth over the period, despite some fluctuations in EBITDA in the middle years. The EV/EBITDA multiple shows volatility but settles at a lower level than at the beginning, which could imply a more balanced or possibly more favorable valuation relative to earnings generation capacity towards the end of the period analyzed.