Enterprise Value to EBITDA (EV/EBITDA)
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2005
- Return on Equity (ROE) since 2005
- Return on Assets (ROA) since 2005
- Current Ratio since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
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Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
HP Inc., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31).
- Net Earnings
- Net earnings demonstrated a fluctuating trend over the six-year period. Initially, there was a slight decrease from 5113 million USD in 2013 to 5013 million USD in 2014, followed by a further decline to 4554 million USD in 2015. A more pronounced reduction occurred in 2016, with net earnings dropping to 2496 million USD, stabilizing somewhat in 2017 at 2526 million USD. In 2018, a significant recovery was observed, with net earnings rising sharply to 5327 million USD, surpassing the figures of the earlier years.
- Earnings Before Tax (EBT)
- EBT showed a decreasing trajectory over the period. Starting at 6510 million USD in 2013, it slightly increased to 6557 million USD in 2014 but then consistently declined in subsequent years. By 2015, EBT decreased to 4732 million USD, continuing downward to 3761 million USD in 2016, 3276 million USD in 2017, and reaching its lowest point at 3013 million USD in 2018. This steady decline suggests increasing tax impacts or reduced profitability before tax considerations over time.
- Earnings Before Interest and Tax (EBIT)
- EBIT followed a pattern similar to EBT, with an initial slight decrease from 6936 million USD in 2013 to 6901 million USD in 2014. A more significant fall occurred in 2015, descending to 5059 million USD. This decreasing trend persisted through 2016 at 4034 million USD, 2017 at 3585 million USD, and 2018 at 3325 million USD. The consistent reduction in EBIT indicates diminishing operating income, potentially reflecting increased operating costs or lower revenues.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- EBITDA experienced a pronounced decline throughout the years observed. Starting at a high of 11547 million USD in 2013, it decreased slightly to 11235 million USD in 2014, followed by a more noticeable drop to 9120 million USD in 2015. Between 2015 and 2016, EBITDA fell drastically to 4366 million USD, then decreased marginally to 3939 million USD in 2017 and to 3853 million USD in 2018. The steep decline in EBITDA from 2015 to 2016 suggests a considerable change in operational efficiency or revenue generation capacity, possibly due to increased operating expenses or other non-cash charges.
Enterprise Value to EBITDA Ratio, Current
HP Inc., 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 | |
| Apple Inc. | |
| Arista Networks Inc. | |
| Cisco Systems Inc. | |
| Dell Technologies Inc. | |
| Super Micro Computer Inc. | |
Based on: 10-K (reporting date: 2018-10-31).
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
HP Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | ||
|---|---|---|---|---|---|---|---|
| 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 | |||||||
| Apple Inc. | |||||||
| Arista Networks Inc. | |||||||
| Cisco Systems Inc. | |||||||
| Dell Technologies Inc. | |||||||
| Super Micro Computer Inc. | |||||||
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31).
3 2018 Calculation
EV/EBITDA = EV ÷ EBITDA
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value experienced significant fluctuations over the observed periods. Starting at approximately 64.4 billion USD in 2013, it increased notably to 77.8 billion USD in 2014. However, there was a sharp decline in 2015 to roughly 29.6 billion USD, followed by a continued decrease to 27.0 billion USD in 2016. The value then showed a modest recovery, rising to about 34.9 billion USD in 2017 and stabilizing near 35.4 billion USD in 2018.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA demonstrated a downward trend throughout the period under review. It began at approximately 11.5 billion USD in 2013 and slightly decreased to 11.2 billion USD in 2014. Subsequently, it fell to 9.1 billion USD in 2015, with a more pronounced drop to 4.4 billion USD in 2016. The decline continued marginally with figures of 3.9 billion USD and 3.9 billion USD in 2017 and 2018, respectively.
- EV/EBITDA Ratio
- The EV/EBITDA ratio, reflecting valuation relative to earnings, exhibited considerable volatility. It started at 5.58 in 2013 and increased to 6.93 in 2014. In 2015, the ratio sharply decreased to 3.24, indicating possibly undervaluation or high earnings relative to enterprise value during that year. However, it then reversed course, rising to 6.18 in 2016 and escalating further to 8.87 in 2017 and 9.20 in 2018. This upward trend in the ratio during the latter years suggests a growing market valuation relative to the declining EBITDA.
- Summary of Trends
- Over the analyzed time frame, the enterprise value showed initial growth followed by a steep decline and partial rebound. EBITDA consistently declined, with a significant drop after 2014, suggesting operational or profitability challenges. The ratio of enterprise value to EBITDA declined sharply in 2015 but subsequently increased substantially, indicating an increasing premium placed on the company's earnings despite the declining EBITDA. This could imply market expectations of future growth, changing business conditions, or shifts in capital structure.