Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Monsanto Co., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).
The financial trajectory from 2012 to 2017 is characterized by a period of initial expansion, a mid-term contraction, and a subsequent recovery. All primary profitability metrics—Net Income, Earnings Before Tax (EBT), Earnings Before Interest and Tax (EBIT), and EBITDA—demonstrate a synchronized movement, peaking in 2014 and reaching a cyclical low in 2016.
- EBITDA Performance Trends
- EBITDA grew steadily from US$ 3,801 million in 2012 to a peak of US$ 4,766 million in 2014. This growth was followed by a two-year decline, with the value falling to US$ 4,310 million in 2015 and further to US$ 3,154 million in 2016. A significant recovery occurred in 2017, as EBITDA rose to US$ 4,086 million.
- Net Income Correlation
- Net income attributable to the company closely mirrors the EBITDA trend, though it exhibits higher volatility. Net income increased from US$ 2,045 million in 2012 to US$ 2,740 million in 2014, before experiencing a sharp decrease to US$ 1,336 million in 2016. The 2017 recovery saw net income return to US$ 2,260 million.
- Depreciation and Amortization Analysis
- An analysis of the variance between EBITDA and EBIT reveals a consistent upward trend in depreciation and amortization expenses. This expense increased from US$ 622 million in 2012 to US$ 748 million in 2017. The steady growth of these non-cash charges suggests ongoing capital investment and an expanding asset base, which persisted even during the period of declining earnings between 2014 and 2016.
- Earnings Stability and Recovery
- The period between 2014 and 2016 represents a significant earnings contraction, where EBITDA declined by approximately 34%. However, the 2017 results indicate a strong rebound, with EBITDA increasing by approximately 30% in a single year, signaling a restoration of operational profitability.
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Enterprise Value to EBITDA Ratio, Current
Monsanto Co., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 58,374) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 4,086) |
| Valuation Ratio | |
| EV/EBITDA | 14.29 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| lululemon athletica inc. | 3.86 |
| Nike Inc. | 11.71 |
Based on: 10-K (reporting date: 2017-08-31).
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
Monsanto Co., historical EV/EBITDA calculation, comparison to benchmarks
| Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | Aug 31, 2013 | Aug 31, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Enterprise value (EV)1 | 59,773) | 52,204) | 46,537) | 59,696) | 54,950) | 46,106) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 4,086) | 3,154) | 4,310) | 4,766) | 4,216) | 3,801) | |
| Valuation Ratio | |||||||
| EV/EBITDA3 | 14.63 | 16.55 | 10.80 | 12.53 | 13.03 | 12.13 | |
| Benchmarks | |||||||
| EV/EBITDA, Competitors4 | |||||||
| lululemon athletica inc. | — | — | — | — | — | — | |
| Nike Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).
3 2017 Calculation
EV/EBITDA = EV ÷ EBITDA
= 59,773 ÷ 4,086 = 14.63
4 Click competitor name to see calculations.
The financial period between 2012 and 2017 is characterized by volatility in both market valuation and operational profitability, resulting in a fluctuating enterprise value to EBITDA multiple.
- Enterprise Value Trends
- Enterprise value demonstrated a general growth trend over the analyzed period, starting at 46,106 million USD in 2012 and reaching a peak of 59,696 million USD in 2014. A significant contraction occurred in 2015, with the value dropping to 46,537 million USD, followed by a consistent recovery that culminated in a period high of 59,773 million USD by August 31, 2017.
- EBITDA Performance
- Operational earnings grew steadily from 3,801 million USD in 2012 to a peak of 4,766 million USD in 2014. This growth was followed by two years of decline, reaching a period low of 3,154 million USD in 2016. A recovery was observed in the final year, with EBITDA rising to 4,086 million USD in 2017.
- EV/EBITDA Ratio Dynamics
- The EV/EBITDA ratio remained relatively stable between 12.13 and 13.03 from 2012 to 2014, before declining to its lowest point of 10.80 in 2015. A sharp increase to 16.55 occurred in 2016, driven by a simultaneous increase in enterprise value and a significant contraction in EBITDA. In 2017, the ratio moderated to 14.63 as EBITDA improved, although it remained elevated compared to the 2012-2015 levels.
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