Enterprise Value to EBITDA (EV/EBITDA)
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Northrop Grumman Corp. pages available for free this week:
- Balance Sheet: Assets
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Assets (ROA) since 2005
- Total Asset Turnover since 2005
- Price to Operating Profit (P/OP) since 2005
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Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Northrop Grumman Corp., 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 Earnings
- The net earnings exhibited significant fluctuations over the five-year period. After a decrease from 3,229 million USD in 2018 to 2,248 million USD in 2019, net earnings rebounded to 3,189 million USD in 2020. The year 2021 saw a pronounced increase to 7,005 million USD, followed by a decline to 4,896 million USD in 2022. Overall, net earnings displayed volatility with a peak in 2021.
- Earnings Before Tax (EBT)
- EBT followed a similar pattern to net earnings, starting at 3,742 million USD in 2018 and dropping to 2,548 million USD in 2019. It then improved to 3,728 million USD in 2020, surged substantially to 8,938 million USD in 2021, and declined to 5,836 million USD in 2022. This trend indicates a strong recovery and peak in 2021, before moderating in 2022.
- Earnings Before Interest and Tax (EBIT)
- EBIT showed a downward trend from 4,304 million USD in 2018 to 3,076 million USD in 2019. The figure rose to 4,321 million USD in 2020 and experienced a sharp increase to 9,494 million USD in 2021, followed by a decline to 6,342 million USD in 2022. This reflects a notable earnings recovery phase culminating in 2021 and a subsequent reduction.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- EBITDA trends mirrored those of EBIT, with a decline from 5,104 million USD in 2018 to 4,341 million USD in 2019, then an increase to 5,588 million USD in 2020. A significant jump to 10,733 million USD occurred in 2021, before EBITDA decreased to 7,684 million USD in 2022. The EBITDA pattern suggests improved operational performance peaking in 2021, and a contraction in the subsequent year.
- Summary
- Across all examined profitability measures, 2019 represented a low point relative to 2018. Each metric then improved moderately in 2020, followed by a substantial peak in 2021. Despite the high performance in 2021, there was a noticeable decline in 2022, yet values remained above levels seen in 2018 through 2020, indicating an overall upward trajectory with marked volatility. The 2021 peak suggests an extraordinary event or operational success during that period, with the subsequent decline in 2022 warranting further investigation to determine causes.
Enterprise Value to EBITDA Ratio, Current
Northrop Grumman Corp., 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 | |
| Boeing Co. | |
| Caterpillar Inc. | |
| Eaton Corp. plc | |
| GE Aerospace | |
| Honeywell International Inc. | |
| Lockheed Martin Corp. | |
| RTX Corp. | |
| EV/EBITDA, Sector | |
| Capital Goods | |
| EV/EBITDA, Industry | |
| Industrials | |
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
Northrop Grumman Corp., 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 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| EV/EBITDA, Sector | ||||||
| Capital Goods | ||||||
| EV/EBITDA, Industry | ||||||
| Industrials | ||||||
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 exhibits a generally increasing trend over the five-year period, starting at 59,592 million US dollars at the end of 2018, rising to 76,153 million in 2019, then experiencing a decline to 58,949 million in 2020. Subsequently, it recovers to 67,634 million in 2021 and further increases to 78,175 million in 2022. This pattern reflects some volatility with a notable dip in 2020, followed by a steady recovery and growth through 2022.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA values show fluctuations over the period examined. Initially, EBITDA decreased from 5,104 million US dollars in 2018 to 4,341 million in 2019. This was followed by a recovery to 5,588 million in 2020 and a significant surge to 10,733 million in 2021. However, in 2022, EBITDA declined to 7,684 million. The data indicates a sharp improvement in operational earnings in 2021, potentially attributable to extraordinary factors, and a subsequent reduction in 2022, though the EBITDA remained above initial levels.
- EV/EBITDA Ratio
- The EV/EBITDA ratio demonstrates considerable variability. Starting at 11.68 in 2018, it rises sharply to 17.54 in 2019, then decreases to 10.55 in 2020. The ratio reaches its lowest point at 6.3 in 2021, coinciding with the peak in EBITDA for that year, before increasing again to 10.17 in 2022. This fluctuation may indicate changing market perceptions of enterprise value relative to operational earnings, with the lowest ratio in 2021 suggesting a period where earnings growth outpaced enterprise valuation increases.
- Overall Observations
- The data reveals volatility in key financial metrics over the five years, with a noteworthy EBITDA peak in 2021 influencing valuation multiples significantly. Despite the temporary reductions in EBITDA and EV during 2019 and 2020, both metrics recover and reach higher levels by the end of 2022. The EV/EBITDA ratio’s fluctuation reflects dynamic market and operational conditions impacting valuation assessments.