.Enterprise Value to EBITDA (EV/EBITDA)
Difficulty: Intermediate
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Target Corp., EBITDA calculation
USD $ in millions
| 12 months ended | Feb 3, 2018 | Jan 28, 2017 | Jan 30, 2016 | Jan 31, 2015 | Feb 1, 2014 | Feb 2, 2013 | |
|---|---|---|---|---|---|---|---|
| | Net earnings (loss) | ||||||
| | Less: Discontinued operations, net of tax | ||||||
| | Add: Income tax expense | ||||||
| | Earnings before tax (EBT) | ||||||
| | Add: Net interest expense | ||||||
| | Earnings before interest and tax (EBIT) | ||||||
| | Add: Depreciation and amortization | ||||||
| | Earnings before interest, tax, depreciation and amortization (EBITDA) |
| Item | Description | The company |
|---|---|---|
| EBITDA | To calculate EBITDA analysts start with net earnings. To that earnings number, interest, taxes, depreciation, and amortization are added. EBITDA as a pre-interest number is a flow to all providers of capital. | Target Corp.'s EBITDA declined from 2016 to 2017 and from 2017 to 2018. |
Enterprise Value to EBITDA Ratio, Current
Target Corp., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (USD $ in millions) | |
| Enterprise value (EV) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | |
| Ratio | |
| EV/EBITDA | |
| Benchmarks | |
| EV/EBITDA, Competitors | |
| Amazon.com Inc. | |
| Costco Wholesale Corp. | |
| eBay Inc. | |
| Home Depot Inc. | |
| Lowe's Cos. Inc. | |
| Netflix Inc. | |
| TJX Cos. Inc. | |
| Walmart Inc. | |
| EV/EBITDA, Sector | |
| General Retailers | |
| EV/EBITDA, Industry | |
| Consumer Services | |
If company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
Target Corp., historical EV/EBITDA calculation, comparison to benchmarks
| Feb 3, 2018 | Jan 28, 2017 | Jan 30, 2016 | Jan 31, 2015 | Feb 1, 2014 | Feb 2, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| | Enterprise value (EV)1 | ||||||
| | Earnings before interest, tax, depreciation and amortization (EBITDA)2 | ||||||
| Ratio | |||||||
| | EV/EBITDA3 | ||||||
| Benchmarks | |||||||
| EV/EBITDA, Competitors | |||||||
| Amazon.com Inc. | |||||||
| Costco Wholesale Corp. | |||||||
| eBay Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe's Cos. Inc. | |||||||
| Netflix Inc. | |||||||
| TJX Cos. Inc. | |||||||
| Walmart Inc. | |||||||
| EV/EBITDA, Sector | |||||||
| General Retailers | |||||||
| EV/EBITDA, Industry | |||||||
| Consumer Services | |||||||
2018 Calculations
3 EV/EBITDA = EV ÷ EBITDA
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| EV/EBITDA | EV/EBITDA is a valuation indicator for the overall company rather than common stock. | Target Corp.'s EV/EBITDA ratio declined from 2016 to 2017 but then increased from 2017 to 2018 not reaching 2016 level. |
