Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
EMC Corp., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
Over the analyzed period, the financial performance indicators demonstrate varying trends in profitability and earnings capacity.
- Net income attributable to EMC Corporation
- Net income shows an initial upward trend from 2011 through 2013, increasing steadily from approximately 2,461 million USD to a peak of 2,889 million USD. However, in the subsequent years, there is a noticeable decline, dropping to 2,714 million USD in 2014 and further decreasing sharply to 1,990 million USD in 2015. This reflects a significant reduction in net profitability by the end of the period.
- Earnings before tax (EBT)
- EBT follows a similar pattern to net income, rising from 3,249 million USD in 2011 to a high of 3,865 million USD in 2013. Thereafter, it experiences a reduction, moving down to 3,762 million USD in 2014 and then falling more considerably to 2,882 million USD in 2015. This decline suggests increasing tax expenses or a deteriorating operational margin before tax in the later years.
- Earnings before interest and tax (EBIT)
- EBIT data exhibits growth from 3,420 million USD in 2011 to a maximum of 4,021 million USD in 2013. Afterwards, EBIT decreases modestly to 3,909 million USD in 2014, followed by a more pronounced fall to 3,046 million USD in 2015. The trend implies a weakening in core operational profitability before considering the effects of interest and tax.
- Earnings before interest, tax, depreciation and amortization (EBITDA)
- EBITDA shows a steady upward trajectory from 4,841 million USD in 2011 to 5,773 million USD in 2014, indicating improving operating cash flow generation capability. Despite this, there is a sharp downturn in 2015, with EBITDA dropping to 4,953 million USD. This decrease suggests possible challenges in cost management or revenue generation impacting cash profitability.
In summary, the company experienced growth in all key earnings measures up to around 2013-2014, followed by a consistent decline in 2015. The most significant decreases occur in net income and EBT, indicating escalating costs, reduced revenues, or unfavorable tax impacts. The EBITDA trend highlights a late-stage operational and cash flow pressure. Overall, the data reflects a period of financial strength concluding with a notable downturn in the final year analyzed.
Enterprise Value to EBITDA Ratio, Current
EMC Corp., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 54,750) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 4,953) |
| Valuation Ratio | |
| EV/EBITDA | 11.05 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Advanced Micro Devices Inc. | 42.53 |
| Analog Devices Inc. | 30.24 |
| Applied Materials Inc. | 17.07 |
| Broadcom Inc. | 56.64 |
| Intel Corp. | 109.57 |
| KLA Corp. | 31.87 |
| Lam Research Corp. | 25.59 |
| Micron Technology Inc. | 14.85 |
| NVIDIA Corp. | 44.73 |
| Qualcomm Inc. | 14.09 |
| Texas Instruments Inc. | 26.82 |
Based on: 10-K (reporting date: 2015-12-31).
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
EMC Corp., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 49,565) | 56,338) | 49,998) | 45,643) | 54,456) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 4,953) | 5,773) | 5,686) | 5,410) | 4,841) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 10.01 | 9.76 | 8.79 | 8.44 | 11.25 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Advanced Micro Devices Inc. | — | — | — | — | — | |
| Analog Devices Inc. | — | — | — | — | — | |
| Applied Materials Inc. | — | — | — | — | — | |
| Broadcom Inc. | — | — | — | — | — | |
| Intel Corp. | — | — | — | — | — | |
| KLA Corp. | — | — | — | — | — | |
| Lam Research Corp. | — | — | — | — | — | |
| Micron Technology Inc. | — | — | — | — | — | |
| NVIDIA Corp. | — | — | — | — | — | |
| Qualcomm Inc. | — | — | — | — | — | |
| Texas Instruments Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
3 2015 Calculation
EV/EBITDA = EV ÷ EBITDA
= 49,565 ÷ 4,953 = 10.01
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value displayed a fluctuating trend over the five-year period. It initially decreased significantly from 54,456 million US dollars at the end of 2011 to 45,643 million in 2012, a drop of approximately 16.2%. Following this decline, EV showed a recovery trend by increasing to 49,998 million in 2013 and further rising to its peak of 56,338 million in 2014. However, in 2015, the EV declined again to 49,565 million, representing a decrease of about 12% from its 2014 peak.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA exhibited an overall positive trend from 2011 to 2014, increasing steadily from 4,841 million US dollars to 5,773 million. This consistent growth indicates improving operational profitability during this timeframe. In 2015, however, EBITDA experienced a notable decline to 4,953 million, which corresponds to a reduction of approximately 14.2% compared to the previous year.
- EV/EBITDA Ratio
- The EV/EBITDA ratio followed a downward trend from 11.25 in 2011 to 8.44 in 2012, reflecting an improvement in valuation multiples likely due to the simultaneous decrease in EV and increase in EBITDA. After hitting the low in 2012, the ratio gradually increased over the subsequent years, moving to 8.79 in 2013, 9.76 in 2014, and reaching 10.01 in 2015. The rising ratio after 2012 suggests that the enterprise value grew relatively faster than EBITDA or that EBITDA growth did not keep pace with EV in those later years, possibly indicating a higher market valuation relative to earnings or a shift in operational performance.
- Overall Insights
- The financial data reveals a company experiencing volatility in both enterprise value and operating profitability over the examined period. The improvement in EBITDA through 2014 followed by a decline in 2015 could signal operational challenges or changing market conditions in the most recent year. The EV movements suggest fluctuating market valuation perceptions or capital structure adjustments. The upward shift in the EV/EBITDA ratio after 2012 implies increased valuation multiples or weakening earnings momentum in the latter years. These patterns highlight the importance of closely monitoring profitability trends against market valuation to assess financial health and investment attractiveness.