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Avago Technologies Ltd (NAS:AVGO)
Enterprise Value
$16,322 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, Avago Technologies Ltd's enterprise value is $16,322 Mil. Avago Technologies Ltd's operating income for the trailing twelve months (TTM) ended in Apr. 2014 was $609 Mil. Therefore, Avago Technologies Ltd's EV/EBIT ratio for today is 26.80.

EV/EBITDA ratio is calculated as enterprise value divided by its EBITDA. As of today, Avago Technologies Ltd's enterprise value is $16,322 Mil. Avago Technologies Ltd's earnings before depreciation and amortization for the trailing twelve months (TTM) ended in Apr. 2014 was $846 Mil. Therefore, Avago Technologies Ltd's EV/EBITDA ratio for today is 19.29.

EV/Revenue ratio is calculated as enterprise value divided by its Revenue. As of today, Avago Technologies Ltd's enterprise value is $16,322 Mil. Avago Technologies Ltd's revenue for the trailing twelve months (TTM) ended in Apr. 2014 was $2,792 Mil. Therefore, Avago Technologies Ltd's EV/Revenue ratio for today is 5.85.


Definition

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

Avago Technologies Ltd's Enterprise Value for the fiscal year that ended in Oct. 2013 is calculated as

Enterprise Value (A: Oct. 2013 )
=Market Cap+Preferred Stock+Long-Term Debt
=11250.7395+0+1
+Short-Term Debt Without Lease+Minority Interest-Cash and Cash Equivalents
+0+0-1031
=10,221

Avago Technologies Ltd's Enterprise Value for the quarter that ended in Apr. 2014 is calculated as

Enterprise Value (Q: Apr. 2014 )
=Market Cap+Preferred Stock+Long-Term Debt
=15854.045+0+0
+Short-Term Debt Without Lease+Minority Interest-Cash and Cash Equivalents
+0+0-1278
=14,576

* 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.

Avago Technologies Ltd's EV/EBIT for today is

EV/EBIT ratio=Enterprise Value (Today)/Operating Income (TTM)
=16322.065/609
=26.80

Avago Technologies Ltd's current Enterprise Value is $16,322 Mil.
Avago Technologies Ltd's Operating Income for the trailing twelve months (TTM) ended in Apr. 2014 was 140 (Jul. 2013 ) + 170 (Oct. 2013 ) + 139 (Jan. 2014 ) + 160 (Apr. 2014 ) = $609 Mil.

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

Avago Technologies Ltd's EV/EBITDA for today is:

Avago Technologies Ltd's current Enterprise Value is $16,322 Mil.
Avago Technologies Ltd's Earnings Before Depreciation and Amortization for the trailing twelve months (TTM) ended in Apr. 2014 was 191 (Jul. 2013 ) + 238 (Oct. 2013 ) + 196 (Jan. 2014 ) + 221 (Apr. 2014 ) = $846 Mil.

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

Avago Technologies Ltd's EV/Revenue for today is:

EV/Revenue ratio=Enterprise Value (Today)/Revenue (TTM)
=16322.065/2792
=5.85

Avago Technologies Ltd's current Enterprise Value is $16,322 Mil.
Avago Technologies Ltd's Earnings Before Depreciation and Amortization for the trailing twelve months (TTM) ended in Apr. 2014 was 644 (Jul. 2013 ) + 738 (Oct. 2013 ) + 709 (Jan. 2014 ) + 701 (Apr. 2014 ) = $2,792 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.

Avago Technologies Ltd Annual Data

Oct07Oct08Oct09Oct10Oct11Oct12Oct13
ev 000003,4105,5937,4817,01010,221

Avago Technologies Ltd Quarterly Data

Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14
ev 7,4577,4878,0617,0107,6616,6748,21610,22112,53014,576
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