Enterprise value to EBIT (EV/EBIT)
What a buyer of the whole company pays for one unit of operating profit, after depreciation has been charged.
It is the honest sibling of EV/EBITDA: the wearing out of the assets is charged rather than ignored.
How it is computed here
(Market capitalisation + total debt - cash) / operating income
Today's market price against the latest available fundamentals. Combines today's market price with the most recently filed fundamentals. It moves whenever the price moves, with nothing having changed in the business. Filed under value. Neither a high nor a low reading is good on its own, so it is never coloured as one.
No published threshold exists for this figure, so this page prints none. Read it against the company's own history and its peers instead.
When it misleads
- Depreciation schedules are an accounting choice, so two identical businesses can report different EBIT.
- On a cyclical business at peak earnings this looks cheapest exactly when it is most dangerous, and dearest at the trough.
Not meaningful for banks, insurers: the product prints n/m with the reason rather than a number for them.
Ten filed years of it, company by company
Any covered company has the page at /metrics/ev-to-ebit/TICKER. These are the ones with at least 5 computed years among the largest companies covered, listed alphabetically.
AAPL · ABBV · ABT · ADI · AMAT · AMD · AMGN · AMZN · ANET · APH · AVGO · AXP · CAT · COP · COST · CRM · CSCO · CVX · DELL · DHR · DIS · ETN · GILD · HD · IBM · INTC · JNJ · KLAC · KO · LIN · LLY · LRCX · MA · MCD · MRK · MSFT · MU · NEE · NFLX · NVDA · PEP · PFE · PG · PM · QCOM · RTX · STX · T · TJX · TMO · TMUS · TSLA · TXN · UNH · UNP · VZ · WMT
Questions
How is enterprise value to ebit calculated?
(Market capitalisation + total debt - cash) / operating income. Today's market price against the latest available fundamentals. Combines today's market price with the most recently filed fundamentals. It moves whenever the price moves, with nothing having changed in the business.
What does enterprise value to ebit tell a value investor?
It is the honest sibling of EV/EBITDA: the wearing out of the assets is charged rather than ignored.
When does enterprise value to ebit mislead?
Depreciation schedules are an accounting choice, so two identical businesses can report different EBIT. On a cyclical business at peak earnings this looks cheapest exactly when it is most dangerous, and dearest at the trough.