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Discover Financial Services (NYSE:DFS)
Enterprise Value
$42,819 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, Discover Financial Services's enterprise value is $42,819 Mil. Discover Financial Services's operating income for the trailing twelve months (TTM) ended in Jun. 2014 was $3,920 Mil. Therefore, Discover Financial Services's EV/EBIT ratio for today is 10.92.

EV/EBITDA ratio is calculated as enterprise value divided by its EBITDA. As of today, Discover Financial Services's enterprise value is $42,819 Mil. Discover Financial Services's earnings before depreciation and amortization for the trailing twelve months (TTM) ended in Jun. 2014 was $4,272 Mil. Therefore, Discover Financial Services's EV/EBITDA ratio for today is 10.02.

EV/Revenue ratio is calculated as enterprise value divided by its Revenue. As of today, Discover Financial Services's enterprise value is $42,819 Mil. Discover Financial Services's revenue for the trailing twelve months (TTM) ended in Jun. 2014 was $8,441 Mil. Therefore, Discover Financial Services's EV/Revenue ratio for today is 5.07.


Definition

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

Discover Financial Services's Enterprise Value for the fiscal year that ended in Dec. 2013 is calculated as

Enterprise Value (A: Dec. 2013 )
=Market Cap+Preferred Stock+Long-Term Debt
=26679.198+560+20474
+Short-Term Debt Without Lease+Minority Interest-Cash and Cash Equivalents
+140+0-6554
=41,299

Discover Financial Services's Enterprise Value for the quarter that ended in Jun. 2014 is calculated as

Enterprise Value (Q: Jun. 2014 )
=Market Cap+Preferred Stock+Long-Term Debt
=28899.4146+560+20057
+Short-Term Debt Without Lease+Minority Interest-Cash and Cash Equivalents
+120+0-6879
=42,757

* 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.

Discover Financial Services's EV/EBIT for today is

EV/EBIT ratio=Enterprise Value (Today)/Operating Income (TTM)
=42819.400/3920
=10.92

Discover Financial Services's current Enterprise Value is $42,819 Mil.
Discover Financial Services's Operating Income for the trailing twelve months (TTM) ended in Jun. 2014 was 946 (Sep. 2013 ) + 937 (Dec. 2013 ) + 1022 (Mar. 2014 ) + 1015 (Jun. 2014 ) = $3,920 Mil.

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

Discover Financial Services's EV/EBITDA for today is:

Discover Financial Services's current Enterprise Value is $42,819 Mil.
Discover Financial Services's Earnings Before Depreciation and Amortization for the trailing twelve months (TTM) ended in Jun. 2014 was 1030 (Sep. 2013 ) + 1024 (Dec. 2013 ) + 1112 (Mar. 2014 ) + 1106 (Jun. 2014 ) = $4,272 Mil.

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

Discover Financial Services's EV/Revenue for today is:

EV/Revenue ratio=Enterprise Value (Today)/Revenue (TTM)
=42819.400/8441
=5.07

Discover Financial Services's current Enterprise Value is $42,819 Mil.
Discover Financial Services's Earnings Before Depreciation and Amortization for the trailing twelve months (TTM) ended in Jun. 2014 was 2062 (Sep. 2013 ) + 2129 (Dec. 2013 ) + 2078 (Mar. 2014 ) + 2172 (Jun. 2014 ) = $8,441 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.

Discover Financial Services Annual Data

Nov05Nov06Nov07Nov08Nov09Nov10Nov11Nov12Dec12Dec13
ev 008,875-3,026-2,39122,18928,08437,36328,08041,299

Discover Financial Services Quarterly Data

May12Aug12Nov12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
ev 31,03732,91337,36328,08034,11236,24237,92441,29939,53742,757
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