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Southwest Airlines Co (NYSE:LUV)
Enterprise Value
$22,696 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, Southwest Airlines Co's enterprise value is $22,696 Mil. Southwest Airlines Co's earnings before interest and taxes (EBIT) for the trailing twelve months (TTM) ended in Sep. 2015 was $3,032 Mil. Therefore, Southwest Airlines Co's EV/EBIT ratio for today is 7.49.

EV/EBITDA ratio is calculated as enterprise value divided by its EBITDA. As of today, Southwest Airlines Co's enterprise value is $22,696 Mil. Southwest Airlines Co's earnings before depreciation and amortization for the trailing twelve months (TTM) ended in Sep. 2015 was $4,035 Mil. Therefore, Southwest Airlines Co's EV/EBITDA ratio for today is 5.62.

EV/Revenue ratio is calculated as enterprise value divided by its Revenue. As of today, Southwest Airlines Co's enterprise value is $22,696 Mil. Southwest Airlines Co's revenue for the trailing twelve months (TTM) ended in Sep. 2015 was $19,471 Mil. Therefore, Southwest Airlines Co's EV/Revenue ratio for today is 1.17.


Definition

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

Southwest Airlines Co's Enterprise Value for the fiscal year that ended in Dec. 2014 is calculated as

Enterprise Value (A: Dec. 2014 )
=Market Cap+Preferred Stock+Long-Term Debt
=28590.9688+0+2627
+Short-Term Debt Without Lease+Minority Interest-Cash and Cash Equivalents
+258+0-2988
=28,488

Southwest Airlines Co's Enterprise Value for the quarter that ended in Sep. 2015 is calculated as

Enterprise Value (Q: Sep. 2015 )
=Market Cap+Preferred Stock+Long-Term Debt
=24739.6944+0+2381
+Short-Term Debt Without Lease+Minority Interest-Cash and Cash Equivalents
+287+0-3096
=24,312

* 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.

Southwest Airlines Co's EV/EBIT for today is

Southwest Airlines Co's current Enterprise Value is $22,696 Mil.
Southwest Airlines Co's Earnings Before Interest and Taxes (EBIT) for the trailing twelve months (TTM) ended in Sep. 2015 was 329 (Dec. 2014 ) + 749 (Mar. 2015 ) + 999 (Jun. 2015 ) + 955 (Sep. 2015 ) = $3,032 Mil.

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

Southwest Airlines Co's EV/EBITDA for today is:

Southwest Airlines Co's current Enterprise Value is $22,696 Mil.
Southwest Airlines Co's Earnings Before Depreciation and Amortization for the trailing twelve months (TTM) ended in Sep. 2015 was 580 (Dec. 2014 ) + 993 (Mar. 2015 ) + 1249 (Jun. 2015 ) + 1213 (Sep. 2015 ) = $4,035 Mil.

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

Southwest Airlines Co's EV/Revenue for today is:

EV/Revenue ratio=Enterprise Value (Today)/Revenue (TTM)
=22695.656/19471
=1.17

Southwest Airlines Co's current Enterprise Value is $22,696 Mil.
Southwest Airlines Co's Earnings Before Depreciation and Amortization for the trailing twelve months (TTM) ended in Sep. 2015 was 4628 (Dec. 2014 ) + 4414 (Mar. 2015 ) + 5111 (Jun. 2015 ) + 5318 (Sep. 2015 ) = $19,471 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.

Southwest Airlines Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
ev 11,9308,2778,2349,4129,5447,5318,03812,86528,4880

Southwest Airlines Co Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
ev 9,69112,86515,91617,40922,29528,48829,19521,37324,3120
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