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Red Hat Inc (NYSE:RHT)
Enterprise Value
$13,971 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, Red Hat Inc's enterprise value is $13,971 Mil. Red Hat Inc's earnings before interest and taxes (EBIT) for the trailing twelve months (TTM) ended in May. 2016 was $303 Mil. Therefore, Red Hat Inc's EV/EBIT ratio for today is 46.14.

EV/EBITDA ratio is calculated as enterprise value divided by its EBITDA. As of today, Red Hat Inc's enterprise value is $13,971 Mil. Red Hat Inc's earnings before depreciation and amortization for the trailing twelve months (TTM) ended in May. 2016 was $381 Mil. Therefore, Red Hat Inc's EV/EBITDA ratio for today is 36.67.

EV/Revenue ratio is calculated as enterprise value divided by its Revenue. As of today, Red Hat Inc's enterprise value is $13,971 Mil. Red Hat Inc's revenue for the trailing twelve months (TTM) ended in May. 2016 was $2,139 Mil. Therefore, Red Hat Inc's EV/Revenue ratio for today is 6.53.


Definition

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

Red Hat Inc's Enterprise Value for the fiscal year that ended in Feb. 2016 is calculated as

Enterprise Value (A: Feb. 2016 )
=Market Cap+Preferred Stock+Long-Term Debt & Capital Lease Obligation
=11840.7665+0+723.942
+Current Portion of Long-Term Debt+Minority Interest-Cash and Cash Equivalents
+0+0-1208.92
=11,356

Red Hat Inc's Enterprise Value for the quarter that ended in May. 2016 is calculated as

Enterprise Value (Q: May. 2016 )
=Market Cap+Preferred Stock+Long-Term Debt & Capital Lease Obligation
=14027.2314+0+729.307
+Current Portion of Long-Term Debt+Minority Interest-Cash and Cash Equivalents
+0+0-1396.415
=13,360

* 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.

Red Hat Inc's EV/EBIT for today is

Red Hat Inc's current Enterprise Value is $13,971 Mil.
Red Hat Inc's Earnings Before Interest and Taxes (EBIT) for the trailing twelve months (TTM) ended in May. 2016 was 78.12 (Aug. 2015 ) + 71.8 (Nov. 2015 ) + 74.624 (Feb. 2016 ) + 78.24 (May. 2016 ) = $303 Mil.

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

Red Hat Inc's EV/EBITDA for today is:

Red Hat Inc's current Enterprise Value is $13,971 Mil.
Red Hat Inc's Earnings Before Depreciation and Amortization for the trailing twelve months (TTM) ended in May. 2016 was 96.658 (Aug. 2015 ) + 91.658 (Nov. 2015 ) + 93.768 (Feb. 2016 ) + 98.942 (May. 2016 ) = $381 Mil.

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

Red Hat Inc's EV/Revenue for today is:

EV/Revenue ratio=Enterprise Value (Today)/Revenue (TTM)
=13970.902/2139.129
=6.53

Red Hat Inc's current Enterprise Value is $13,971 Mil.
Red Hat Inc's Earnings Before Depreciation and Amortization for the trailing twelve months (TTM) ended in May. 2016 was 504.148 (Aug. 2015 ) + 523.58 (Nov. 2015 ) + 543.502 (Feb. 2016 ) + 567.899 (May. 2016 ) = $2,139 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 & Capital Lease Obligation, Cash and Cash Equivalents, Current Portion of Long-Term Debt


Historical Data

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

Red Hat Inc Annual Data

Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15Feb16
ev 4,0292,9832,2314,4947,1098,7468,92810,20912,12711,356

Red Hat Inc Quarterly Data

May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16
ev 8,64710,63910,99212,12713,71312,75214,46011,35613,3600
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