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Willis Group Holdings PLC (NYSE:WSH)
Enterprise Value
$-400 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, Willis Group Holdings PLC's enterprise value is $-400 Mil. Willis Group Holdings PLC's operating income for the trailing twelve months (TTM) ended in Mar. 2014 was $724 Mil. Therefore, Willis Group Holdings PLC's EV/EBIT ratio for today is -0.55.

EV/EBITDA ratio is calculated as enterprise value divided by its EBITDA. As of today, Willis Group Holdings PLC's enterprise value is $-400 Mil. Willis Group Holdings PLC's earnings before depreciation and amortization for the trailing twelve months (TTM) ended in Mar. 2014 was $773 Mil. Therefore, Willis Group Holdings PLC's EV/EBITDA ratio for today is -0.52.

EV/Revenue ratio is calculated as enterprise value divided by its Revenue. As of today, Willis Group Holdings PLC's enterprise value is $-400 Mil. Willis Group Holdings PLC's revenue for the trailing twelve months (TTM) ended in Mar. 2014 was $3,701 Mil. Therefore, Willis Group Holdings PLC's EV/Revenue ratio for today is -0.11.


Definition

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

Willis Group Holdings PLC'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
=7965.8737+0+2311
+Short-Term Debt Without Lease+Minority Interest-Cash and Cash Equivalents
+15+28-796
=9,524

Willis Group Holdings PLC's Enterprise Value for the quarter that ended in Mar. 2014 is calculated as

Enterprise Value (Q: Mar. 2014 )
=Market Cap+Preferred Stock+Long-Term Debt
=7900.1526+0+2307
+Short-Term Debt Without Lease+Minority Interest-Cash and Cash Equivalents
+15+30-734
=9,518

* 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.

Willis Group Holdings PLC's EV/EBIT for today is

EV/EBIT ratio=Enterprise Value (Today)/Operating Income (TTM)
=-399.613/724
=-0.55

Willis Group Holdings PLC's current Enterprise Value is $-400 Mil.
Willis Group Holdings PLC's Operating Income for the trailing twelve months (TTM) ended in Mar. 2014 was 171 (Jun. 2013 ) + 75 (Sep. 2013 ) + 152 (Dec. 2013 ) + 326 (Mar. 2014 ) = $724 Mil.

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

Willis Group Holdings PLC's EV/EBITDA for today is:

Willis Group Holdings PLC's current Enterprise Value is $-400 Mil.
Willis Group Holdings PLC's Earnings Before Depreciation and Amortization for the trailing twelve months (TTM) ended in Mar. 2014 was 206 (Jun. 2013 ) + 50 (Sep. 2013 ) + 191 (Dec. 2013 ) + 326 (Mar. 2014 ) = $773 Mil.

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

Willis Group Holdings PLC's EV/Revenue for today is:

EV/Revenue ratio=Enterprise Value (Today)/Revenue (TTM)
=-399.613/3701
=-0.11

Willis Group Holdings PLC's current Enterprise Value is $-400 Mil.
Willis Group Holdings PLC's Earnings Before Depreciation and Amortization for the trailing twelve months (TTM) ended in Mar. 2014 was 890 (Jun. 2013 ) + 795 (Sep. 2013 ) + 919 (Dec. 2013 ) + 1097 (Mar. 2014 ) = $3,701 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.

Willis Group Holdings PLC Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
ev 6,4636,1816,7386,4986,6426,6517,9018,7337,6849,524

Willis Group Holdings PLC Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
ev 8,0918,3758,3807,6848,7899,0349,4369,5249,5180
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