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GuruFocus has detected 4 Warning Signs with Adobe Systems Inc $ADBE.
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Adobe Systems Inc (NAS:ADBE)
Enterprise Value
$63,397 Mil (As of Today)

Think of enterprise value as the theoretical takeover price. It is more comprehensive than market capitalization (market cap), which only includes common equity. Enterprise Value is calculated as the market cap plus debt and minority interest and preferred shares, minus total cash and cash equivalents.

EV/EBIT ratio is calculated as enterprise value divided by its EBIT. As of today, Adobe Systems Inc's enterprise value is $63,397 Mil. Adobe Systems Inc's earnings before interest and taxes (EBIT) for the trailing twelve months (TTM) ended in Feb. 2017 was $1,674 Mil. Therefore, Adobe Systems Inc's EV/EBIT ratio for today is 37.88.

EV/EBITDA ratio is calculated as enterprise value divided by its EBITDA. As of today, Adobe Systems Inc's enterprise value is $63,397 Mil. Adobe Systems Inc's earnings before depreciation and amortization for the trailing twelve months (TTM) ended in Feb. 2017 was $2,005 Mil. Therefore, Adobe Systems Inc's EV/EBITDA ratio for today is 31.62.

EV/Revenue ratio is calculated as enterprise value divided by its Revenue. As of today, Adobe Systems Inc's enterprise value is $63,397 Mil. Adobe Systems Inc's revenue for the trailing twelve months (TTM) ended in Feb. 2017 was $6,153 Mil. Therefore, Adobe Systems Inc's EV/Revenue ratio for today is 10.30.


Definition

Enterprise Value is calculated as the market cap plus debt and minority interest and preferred shares, minus total cash and cash equivalents.

Adobe Systems Inc's Enterprise Value for the fiscal year that ended in Nov. 2016 is calculated as

Enterprise Value (A: Nov. 2016 )
=Market Cap+Preferred Stock+Long-Term Debt & Capital Lease Obligation
=51099.6543+0+1902.068
+Current Portion of Long-Term Debt+Minority Interest-Cash and Cash Equivalents
+0+0-4761.3
=48,240

Adobe Systems Inc's Enterprise Value for the quarter that ended in Feb. 2017 is calculated as

Enterprise Value (Q: Feb. 2017 )
=Market Cap+Preferred Stock+Long-Term Debt & Capital Lease Obligation
=58657.5878+0+1884.074
+Current Portion of Long-Term Debt+Minority Interest-Cash and Cash Equivalents
+0+0-4647.617
=55,894

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Explanation

When an investor buy a company, the investor needs to pay not only the common shares, he/she also needs to pay the shareholders of Preferred Stocks. He also assumes the debt of the company, and receives the cash on the company's balance sheet.

If a company has more cash than debt, the investor actually pays less than the Market Cap because he immediately owns the cash once the transaction goes through.

The market value of Preferred Stock needs to be added to the market value of common stocks in the calculation of enterprise value.

For the companies with the same Market Cap, the smaller the Enterprise Value is, the cheaper the company is.

Enterprise Value can be negative when the company's net cash is more than its Market Cap. In this case the investor is basically getting the company for free and get paid for that.

1. EV/EBIT ratio is calculated as enterprise value divided by its EBIT.

Adobe Systems Inc's EV/EBIT for today is

Adobe Systems Inc's current Enterprise Value is $63,397 Mil.
Adobe Systems Inc's Earnings Before Interest and Taxes (EBIT) for the trailing twelve months (TTM) ended in Feb. 2017 was 347.004 (May. 2016 ) + 373.582 (Aug. 2016 ) + 474.218 (Nov. 2016 ) + 478.762 (Feb. 2017 ) = $1,674 Mil.

2. EV/EBITDA ratio is calculated as enterprise value divided by its EBITDA.

Adobe Systems Inc's EV/EBITDA for today is:

Adobe Systems Inc's current Enterprise Value is $63,397 Mil.
Adobe Systems Inc's Earnings Before Depreciation and Amortization for the trailing twelve months (TTM) ended in Feb. 2017 was 431.465 (May. 2016 ) + 457.596 (Aug. 2016 ) + 556.078 (Nov. 2016 ) + 559.571 (Feb. 2017 ) = $2,005 Mil.

3. EV/Revenue ratio is calculated as enterprise value divided by its Revenue.

Adobe Systems Inc's EV/Revenue for today is:

EV/Revenue ratio=Enterprise Value (Today)/Revenue (TTM)
=63397.367/6152.741
=10.30

Adobe Systems Inc's current Enterprise Value is $63,397 Mil.
Adobe Systems Inc's Earnings Before Depreciation and Amortization for the trailing twelve months (TTM) ended in Feb. 2017 was 1398.709 (May. 2016 ) + 1463.967 (Aug. 2016 ) + 1608.419 (Nov. 2016 ) + 1681.646 (Feb. 2017 ) = $6,153 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Related Terms

Market Cap, Preferred Stock, Long-Term Debt & Capital Lease Obligation, Cash and Cash Equivalents, Current Portion of Long-Term Debt


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Adobe Systems Inc Annual Data

Nov07Nov08Nov09Nov10Nov11Nov12Nov13Nov14Nov15Nov16
ev 22,08510,51617,43013,19712,11515,07226,51834,42943,44948,240

Adobe Systems Inc Quarterly Data

Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16Feb17
ev 34,42938,34837,90037,42143,44940,49747,23348,32147,97655,894
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