Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
McDonald’s Corp., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The financial performance indicators demonstrate a generally positive trajectory over the five-year period. Net income, while experiencing a decline from 2021 to 2022, recovers and exhibits consistent growth through 2025. Similarly, earnings at each stage of subtraction – before tax, before interest and tax, and before interest, tax, depreciation, and amortization – generally increase over the observed timeframe.
- EBITDA Trend
- EBITDA initially decreased from US$12,182 million in 2021 to US$10,903 million in 2022, representing a decline of approximately 10.5%. However, a strong recovery is then observed, with EBITDA increasing to US$13,861 million in 2023 and continuing to grow to US$14,678 million by 2025. This represents an overall increase of approximately 20.5% from 2022 to 2025.
- Relationship between Net Income and EBITDA
- EBITDA consistently exceeds net income across all reported years, as expected, due to the deductions for interest, taxes, depreciation, and amortization. The gap between EBITDA and net income remains relatively stable, suggesting consistent cost structures related to these deductions. The correlation between the trends of both metrics is positive; as EBITDA increases, net income generally follows suit.
- EBIT and EBITDA Comparison
- The difference between EBIT and EBITDA represents depreciation and amortization expense. This difference remains relatively consistent year-over-year, indicating a stable depreciation policy and asset base. The consistent relationship between these two metrics suggests no significant changes in the company’s capital expenditure or asset depreciation methods during the period.
- Earnings Progression
- A clear progression is visible from net income to EBT, EBIT, and ultimately EBITDA. Each incremental step – adding back taxes, interest, depreciation, and amortization – results in a higher earnings figure. This progression highlights the impact of non-operating expenses and non-cash charges on the company’s overall profitability. The largest single increase occurs when moving from EBIT to EBITDA, demonstrating the substantial impact of depreciation and amortization.
Overall, the indicators suggest a strengthening financial position, particularly following the dip in 2022. The consistent growth in EBITDA, coupled with the recovery in net income, points to improved operational efficiency and profitability.
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Enterprise Value to EBITDA Ratio, Current
McDonald’s Corp., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 273,468) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 14,678) |
| Valuation Ratio | |
| EV/EBITDA | 18.63 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Airbnb Inc. | 21.00 |
| Booking Holdings Inc. | 14.98 |
| Chipotle Mexican Grill Inc. | 17.42 |
| DoorDash, Inc. | 39.77 |
| Starbucks Corp. | 26.05 |
| EV/EBITDA, Sector | |
| Consumer Services | 19.83 |
| EV/EBITDA, Industry | |
| Consumer Discretionary | 19.49 |
Based on: 10-K (reporting date: 2025-12-31).
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
McDonald’s Corp., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 278,149) | 261,117) | 250,011) | 227,523) | 213,114) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 14,678) | 13,948) | 13,861) | 10,903) | 12,182) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 18.95 | 18.72 | 18.04 | 20.87 | 17.49 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Airbnb Inc. | 19.06 | 23.48 | 40.65 | 36.61 | 338.63 | |
| Booking Holdings Inc. | 15.08 | 17.99 | 19.60 | 19.20 | 45.39 | |
| Chipotle Mexican Grill Inc. | 21.49 | 32.63 | 36.37 | 29.62 | 40.00 | |
| DoorDash, Inc. | 42.86 | 117.31 | — | — | — | |
| Starbucks Corp. | 22.61 | 17.33 | 17.75 | 19.88 | 18.77 | |
| EV/EBITDA, Sector | ||||||
| Consumer Services | 19.76 | 21.52 | 22.30 | 23.77 | 27.18 | |
| EV/EBITDA, Industry | ||||||
| Consumer Discretionary | 45.15 | 20.91 | 18.33 | 20.01 | 21.51 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
3 2025 Calculation
EV/EBITDA = EV ÷ EBITDA
= 278,149 ÷ 14,678 = 18.95
4 Click competitor name to see calculations.
The Enterprise Value to EBITDA ratio exhibited fluctuations over the five-year period. Enterprise Value demonstrated a consistent upward trajectory, while EBITDA experienced more variability. Consequently, the EV/EBITDA ratio itself showed a complex pattern.
- Enterprise Value
- Enterprise Value increased steadily from US$213,114 million in 2021 to US$278,149 million in 2025. The largest year-over-year increase occurred between 2022 and 2023, with an addition of US$22,488 million. Growth rates decelerated in subsequent years, though the overall trend remained positive.
- EBITDA
- EBITDA decreased from US$12,182 million in 2021 to US$10,903 million in 2022, representing a decline of approximately 10.5%. A substantial recovery was observed in 2023, with EBITDA reaching US$13,861 million. EBITDA continued to increase modestly in 2024 and 2025, reaching US$14,678 million. The rate of EBITDA growth slowed considerably after the 2023 rebound.
- EV/EBITDA Ratio
- The EV/EBITDA ratio began at 17.49 in 2021 and rose to 20.87 in 2022, coinciding with the decrease in EBITDA and increase in Enterprise Value. The ratio then decreased to 18.04 in 2023, reflecting the significant EBITDA recovery. From 2023 to 2025, the ratio remained relatively stable, fluctuating between 18.04 and 18.95. The slight increase from 2023 to 2025 suggests that Enterprise Value growth marginally outpaced EBITDA growth during that period.
Overall, the EV/EBITDA ratio indicates a valuation that initially increased, then stabilized, despite fluctuations in underlying earnings. The consistent growth in Enterprise Value suggests investor confidence, while the moderate EBITDA growth indicates a tempered earnings expansion.
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