Switch to:
Aruba Networks Inc (NAS:ARUN)
Enterprise Value
$1,768.0 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, Aruba Networks Inc's enterprise value is $1,768.0 Mil. Aruba Networks Inc's operating income for the trailing twelve months (TTM) ended in Oct. 2014 was $15.6 Mil. Therefore, Aruba Networks Inc's EV/EBIT ratio for today is 113.58.

EV/EBITDA ratio is calculated as enterprise value divided by its EBITDA. As of today, Aruba Networks Inc's enterprise value is $1,768.0 Mil. Aruba Networks Inc's earnings before depreciation and amortization for the trailing twelve months (TTM) ended in Oct. 2014 was $45.3 Mil. Therefore, Aruba Networks Inc's EV/EBITDA ratio for today is 39.02.

EV/Revenue ratio is calculated as enterprise value divided by its Revenue. As of today, Aruba Networks Inc's enterprise value is $1,768.0 Mil. Aruba Networks Inc's revenue for the trailing twelve months (TTM) ended in Oct. 2014 was $775.8 Mil. Therefore, Aruba Networks Inc's EV/Revenue ratio for today is 2.28.


Definition

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

Aruba Networks Inc's Enterprise Value for the fiscal year that ended in Jul. 2014 is calculated as

Enterprise Value (A: Jul. 2014 )
=Market Cap+Preferred Stock+Long-Term Debt
=1970.4992+0+0
+Short-Term Debt Without Lease+Minority Interest-Cash and Cash Equivalents
+0+0-284.953
=1,685.5

Aruba Networks Inc's Enterprise Value for the quarter that ended in Oct. 2014 is calculated as

Enterprise Value (Q: Oct. 2014 )
=Market Cap+Preferred Stock+Long-Term Debt
=2290.89+0+0
+Short-Term Debt Without Lease+Minority Interest-Cash and Cash Equivalents
+0+0-315.296
=1,975.6

* All numbers are in millions except for per share data and ratio. All numbers are in their own 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.

Aruba Networks Inc's EV/EBIT for today is

EV/EBIT ratio=Enterprise Value (Today)/Operating Income (TTM)
=1768.030/15.567
=113.58

Aruba Networks Inc's current Enterprise Value is $1,768.0 Mil.
Aruba Networks Inc's Operating Income for the trailing twelve months (TTM) ended in Oct. 2014 was -3.619 (Jan. 2014 ) + 0.519 (Apr. 2014 ) + 8.463 (Jul. 2014 ) + 10.204 (Oct. 2014 ) = $15.6 Mil.

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

Aruba Networks Inc's EV/EBITDA for today is:

Aruba Networks Inc's current Enterprise Value is $1,768.0 Mil.
Aruba Networks Inc's Earnings Before Depreciation and Amortization for the trailing twelve months (TTM) ended in Oct. 2014 was 3.599 (Jan. 2014 ) + 7.691 (Apr. 2014 ) + 16.536 (Jul. 2014 ) + 17.487 (Oct. 2014 ) = $45.3 Mil.

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

Aruba Networks Inc's EV/Revenue for today is:

EV/Revenue ratio=Enterprise Value (Today)/Revenue (TTM)
=1768.030/775.827
=2.28

Aruba Networks Inc's current Enterprise Value is $1,768.0 Mil.
Aruba Networks Inc's Earnings Before Depreciation and Amortization for the trailing twelve months (TTM) ended in Oct. 2014 was 176.356 (Jan. 2014 ) + 188.788 (Apr. 2014 ) + 202.862 (Jul. 2014 ) + 207.821 (Oct. 2014 ) = $775.8 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Related Terms

Market Cap, Preferred Stock, Long-Term Debt, Cash and Cash Equivalents


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Aruba Networks Inc Annual Data

Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14
ev 0.00.01,480.5379.7647.11,434.12,173.71,235.31,601.61,685.5

Aruba Networks Inc Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
ev 1,235.31,682.92,216.42,160.81,601.61,720.91,820.71,844.31,685.51,975.6
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK