Enterprise Value (EV)
Current Enterprise Value (EV)
McKesson Corp., current enterprise value calculation
| Current share price (P) | $160.50 |
| No. shares of common stock outstanding | 226,086,960 |
| US$ in millions | |
| Common equity (market value)1 | 36,287) |
| Add: Preferred stock, $0.01 par value, no shares issued or outstanding (per books) | —) |
| Add: Noncontrolling interests (per books) | 84) |
| Total equity | 36,371) |
| Add: Short-term borrowings (per books) | 7) |
| Add: Current portion of long-term debt (per books) | 1,612) |
| Add: Long-term debt, excluding current portion (per books) | 6,535) |
| Total equity and debt | 44,525) |
| Less: Cash and cash equivalents | 4,048) |
| Enterprise value (EV) | 40,477) |
Based on: 10-K (reporting date: 2016-03-31).
1 Common equity (market value) = Share price × No. shares of common stock outstanding
= 160.50 × 226,086,960
Historical Enterprise Value (EV)
McKesson Corp., EV calculation
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 Data adjusted for splits and stock dividends.
2 Closing price as at the filing date of McKesson Corp. Annual Report.
3 2016 Calculation
Common equity (market value) = Share price × No. shares of common stock outstanding
= 172.70 × 225,020,523
The financial trajectory between March 31, 2011, and March 31, 2016, is characterized by a period of moderate growth followed by a substantial expansion and a subsequent contraction. The enterprise value (EV) demonstrates a strong positive correlation with the market value of common equity throughout the analyzed period, peaking in 2015 before experiencing a notable decline in 2016.
- Enterprise Value Trends
- Enterprise value exhibited steady growth from 2011 to 2013, rising from 21,278 million US$ to 27,034 million US$. A period of rapid acceleration occurred between 2013 and 2015, where EV increased by approximately 113%, reaching a peak of 57,740 million US$. This upward momentum reversed in 2016, with EV falling to 43,051 million US$, representing a decrease of approximately 25% from the previous year.
- Equity Market Value and Total Equity
- The market value of common equity closely mirrored the movements of total equity. From 2011 to 2013, values remained relatively stable, moving from 20,886 million US$ to 24,617 million US$. A significant surge is observed in 2014, where market value jumped to 41,089 million US$, further climbing to 53,153 million US$ in 2015. By March 31, 2016, a sharp contraction occurred, bringing the market value down to 38,861 million US$.
- Capital Structure and Debt Integration
- The total equity and debt figure shows a similar growth pattern to the enterprise value. There was a marked increase in the total capital base in 2014, rising from 29,490 million US$ to 53,604 million US$. This suggests a substantial expansion in the company's financing or asset base during that fiscal year. The highest total equity and debt level was recorded in 2015 at 63,081 million US$, before retreating to 47,099 million US$ in 2016.
- Correlation Analysis
- The data indicates that enterprise value was primarily driven by the market valuation of equity. The near-simultaneous peaks and troughs across common equity, total equity, and EV suggest that shifts in market sentiment or corporate valuation played a more dominant role in the fluctuations of the enterprise value than changes in debt levels alone.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?