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Five Star Quality Care Inc (NYSE:FVE)
Enterprise Value
$236 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, Five Star Quality Care Inc's enterprise value is $236 Mil. Five Star Quality Care Inc's operating income for the trailing twelve months (TTM) ended in Sep. 2013 was $16 Mil. Therefore, Five Star Quality Care Inc's EV/EBIT ratio for today is 14.73.

EV/EBITDA ratio is calculated as enterprise value divided by its EBITDA. As of today, Five Star Quality Care Inc's enterprise value is $236 Mil. Five Star Quality Care Inc's earnings before depreciation and amortization for the trailing twelve months (TTM) ended in Sep. 2013 was $42 Mil. Therefore, Five Star Quality Care Inc's EV/EBITDA ratio for today is 5.62.

EV/Revenue ratio is calculated as enterprise value divided by its Revenue. As of today, Five Star Quality Care Inc's enterprise value is $236 Mil. Five Star Quality Care Inc's revenue for the trailing twelve months (TTM) ended in Sep. 2013 was $1,293 Mil. Therefore, Five Star Quality Care Inc's EV/Revenue ratio for today is 0.18.


Definition

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

Five Star Quality Care Inc's Enterprise Value for the fiscal year that ended in Dec. 2012 is calculated as

Enterprise Value (A: Dec. 2012 )
=Market Cap+Preferred Stock+Long-Term Debt
=241.6323+0+37.621
+Short-Term Debt Without Lease+Minority Interest-Cash and Cash Equivalents
+25.964+0-37.558
=268

Five Star Quality Care Inc's Enterprise Value for the quarter that ended in Sep. 2013 is calculated as

Enterprise Value (Q: Sep. 2013 )
=Market Cap+Preferred Stock+Long-Term Debt
=249.5559+0+36.758
+Short-Term Debt Without Lease+Minority Interest-Cash and Cash Equivalents
+11.142+0-38.622
=259

* 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.

Five Star Quality Care Inc's EV/EBIT for today is

EV/EBIT ratio=Enterprise Value (Today)/Operating Income (TTM)
=236.371/16.046
=14.73

Five Star Quality Care Inc's current Enterprise Value is $236 Mil.
Five Star Quality Care Inc's Operating Income for the trailing twelve months (TTM) ended in Sep. 2013 was 5.615 (Dec. 2012 ) + 3.262 (Mar. 2013 ) + 4.651 (Jun. 2013 ) + 2.518 (Sep. 2013 ) = $16 Mil.

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

Five Star Quality Care Inc's EV/EBITDA for today is:

Five Star Quality Care Inc's current Enterprise Value is $236 Mil.
Five Star Quality Care Inc's Earnings Before Depreciation and Amortization for the trailing twelve months (TTM) ended in Sep. 2013 was 12.053 (Dec. 2012 ) + 9.916 (Mar. 2013 ) + 11.289 (Jun. 2013 ) + 8.804 (Sep. 2013 ) = $42 Mil.

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

Five Star Quality Care Inc's EV/Revenue for today is:

EV/Revenue ratio=Enterprise Value (Today)/Revenue (TTM)
=236.371/1293.158
=0.18

Five Star Quality Care Inc's current Enterprise Value is $236 Mil.
Five Star Quality Care Inc's Earnings Before Depreciation and Amortization for the trailing twelve months (TTM) ended in Sep. 2013 was 322.185 (Dec. 2012 ) + 323.6 (Mar. 2013 ) + 323.261 (Jun. 2013 ) + 324.112 (Sep. 2013 ) = $1,293 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.

Five Star Quality Care Inc Annual Data

Dec03Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12
ev 3093202423302187145268221268

Five Star Quality Care Inc Quarterly Data

Jun11Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13
ev 279185221243210279268353298259
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