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GuruFocus has detected 5 Warning Signs with GlaxoSmithKline PLC $GSK.
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GlaxoSmithKline PLC (NYSE:GSK)
EV-to-EBIT
37.95 (As of Today)

EV/EBIT ratio is calculated as enterprise value divided by its Earnings Before Interest and Taxes (EBIT). As of today, GlaxoSmithKline PLC's enterprise value is $132,770 Mil. GlaxoSmithKline PLC's earnings before interest and taxes (EBIT) for the trailing twelve months (TTM) ended in Dec. 2016 was $3,498 Mil. Therefore, GlaxoSmithKline PLC's EV/EBIT ratio for today is 37.95.

GSK' s EV-to-EBIT Range Over the Past 10 Years
Min: 6.3   Max: 72.6
Current: 40.25

6.3
72.6

During the past 13 years, the highest EV/EBIT Ratio of GlaxoSmithKline PLC was 72.60. The lowest was 6.30. And the median was 10.60.

GSK's EV-to-EBIT is ranked lower than
83% of the 767 Companies
in the Global Drug Manufacturers - Major industry.

( Industry Median: 19.12 vs. GSK: 40.25 )

Joel Greenblatt calls the inversion of this ratio Earnings Yield (Joel Greenblatt). GlaxoSmithKline PLC's enterprise value for the quarter that ended in Dec. 2016 was $125,393 Mil. GlaxoSmithKline PLC's earnings before interest and taxes (EBIT) for the trailing twelve months (TTM) ended in Dec. 2016 was $3,498 Mil. GlaxoSmithKline PLC's Earnings Yield (Joel Greenblatt) for the quarter that ended in Dec. 2016 was 2.79%.


Definition

GlaxoSmithKline PLC's EV/EBIT for today is calculated as:

EV/EBIT=Enterprise Value (Today)/Earnings Before Interest and Taxes (EBIT) (TTM)
=132769.723/3498.46734194
=37.95

GlaxoSmithKline PLC's current Enterprise Value is $132,770 Mil.
GlaxoSmithKline PLC's Earnings Before Interest and Taxes (EBIT) for the trailing twelve months (TTM) ended in Dec. 2016 was 1055.55555556 (Mar. 2016 ) + -191.761363636 (Jun. 2016 ) + 1909.32982917 (Sep. 2016 ) + 725.343320849 (Dec. 2016 ) = $3,498 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Explanation

This is a more accurate valuation of companies' operation because it consider the debt and cash on its balance sheet, and non-operating items such as interest payment, tax, and one-time items are not included in the Operating Income.

Joel Greenblatt calls the inversion of this ratio Earnings Yield (Joel Greenblatt).

GlaxoSmithKline PLC's Earnings Yield (Joel Greenblatt) for the quarter that ended in Dec. 2016 is calculated as:

Earnings Yield (Joel Greenblatt) (Q: Dec. 2016 )=EBIT (TTM)/Enterprise Value (Q: Dec. 2016 )
=3498.46734194/125393.218828
=2.79 %

GlaxoSmithKline PLC's Enterprise Value for the quarter that ended in Dec. 2016 was $125,393 Mil.
GlaxoSmithKline PLC's Earnings Before Interest and Taxes (EBIT) for the trailing twelve months (TTM) ended in Dec. 2016 was 1055.55555556 (Mar. 2016 ) + -191.761363636 (Jun. 2016 ) + 1909.32982917 (Sep. 2016 ) + 725.343320849 (Dec. 2016 ) = $3,498 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Related Terms

Enterprise Value, Earnings Yield (Joel Greenblatt), Earnings Before Interest and Taxes (EBIT)


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

GlaxoSmithKline PLC Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
ev2ebit 9.6310.259.0618.5910.0510.9512.4524.277.2338.45

GlaxoSmithKline PLC Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
ev2ebit 14.7424.276.846.546.217.2345.4169.5654.6438.45
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