Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
General Dynamics Corp., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
- Net Earnings
- Net earnings showed a generally stable trend from 2015 to 2017, with values around 2,900 million US dollars. Starting in 2018, there was a noticeable increase, reaching 3,345 million US dollars, and further improving to 3,484 million US dollars by 2019. This upward trend indicates improving profitability in recent years.
- Earnings Before Tax (EBT)
- EBT displayed slight fluctuations over the five-year period. It increased from 4,102 million US dollars in 2015 to a peak of 4,231 million US dollars in 2016, followed by a decrease to 4,077 million in 2017. The figure then stabilized with small increases in 2018 and 2019, ending at 4,202 million US dollars. Overall, EBT remained relatively stable with modest growth in the last two years.
- Earnings Before Interest and Tax (EBIT)
- EBIT mirrored the pattern found in EBT, beginning at 4,200 million US dollars in 2015 and experiencing minor fluctuations until 2017 when it was 4,194 million US dollars. Starting 2018, the EBIT values increased more notably, reaching 4,459 million US dollars and then 4,674 million US dollars in 2019. This suggests an improvement in operational profitability and efficiency over time.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA remained relatively consistent from 2015 to 2017, hovering in the mid-4,600 million US dollars range. Beginning in 2018, it showed a strong upward trend, increasing to 5,222 million US dollars and further to 5,503 million US dollars in 2019. The increase in EBITDA is a positive indicator of enhanced cash generation capabilities before accounting for non-cash expenses and financial costs.
Enterprise Value to EBITDA Ratio, Current
General Dynamics Corp., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 49,032) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 5,503) |
| Valuation Ratio | |
| EV/EBITDA | 8.91 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Boeing Co. | — |
| Caterpillar Inc. | 13.92 |
| Eaton Corp. plc | 26.18 |
| GE Aerospace | 28.01 |
| Honeywell International Inc. | 18.00 |
| Lockheed Martin Corp. | 14.36 |
| RTX Corp. | 18.60 |
Based on: 10-K (reporting date: 2019-12-31).
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
General Dynamics Corp., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 64,971) | 61,457) | 63,216) | 56,968) | 41,768) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 5,503) | 5,222) | 4,635) | 4,784) | 4,682) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 11.81 | 11.77 | 13.64 | 11.91 | 8.92 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | — | — | — | — | — | |
| Eaton Corp. plc | — | — | — | — | — | |
| GE Aerospace | — | — | — | — | — | |
| Honeywell International Inc. | — | — | — | — | — | |
| Lockheed Martin Corp. | — | — | — | — | — | |
| RTX Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
3 2019 Calculation
EV/EBITDA = EV ÷ EBITDA
= 64,971 ÷ 5,503 = 11.81
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited an overall upward trend from 2015 to 2019. Starting at $41,768 million in 2015, it increased significantly to $56,968 million in 2016, marking a substantial rise. This growth continued more moderately in 2017, reaching $63,216 million. A slight decline occurred in 2018, when the EV decreased to $61,457 million, before rebounding in 2019 to $64,971 million, the highest value within the period. The trend indicates general expansion in the company's valuation over the five-year span, with a brief dip in 2018.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA values showed more moderate fluctuations compared to EV. Starting at $4,682 million in 2015, EBITDA increased slightly to $4,784 million in 2016. There was a minor decline in 2017 down to $4,635 million, followed by a steady upward movement in the subsequent years, reaching $5,222 million in 2018 and $5,503 million in 2019. This indicates relatively stable operational performance with some growth in profitability towards the end of the period.
- EV/EBITDA Ratio
- The EV/EBITDA ratio increased notably from 8.92 in 2015 to a peak of 13.64 in 2017, suggesting that enterprise value grew at a faster pace relative to EBITDA during the initial years. After this peak, the ratio decreased to 11.77 in 2018 and remained relatively stable at 11.81 in 2019. This pattern suggests a valuation trend where the market premium or perceived valuation relative to earnings initially expanded and then partially corrected or stabilized in the later years.
- Summary
- Overall, the data reveals a company experiencing growth in enterprise value alongside generally stable but modestly increasing EBITDA. The EV/EBITDA multiple reflects an expanding valuation relative to earnings in the early years, peaking in 2017, followed by a normalization period. This may indicate changing market sentiment or adjustments in perceived risk and growth prospects. The slight dip in EV in 2018, despite rising EBITDA, supports this interpretation. The upward trend in EBITDA towards the end implies improving operational profitability, which, together with a stabilized valuation multiple, could be indicative of a more sustainable growth outlook.