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GuruFocus has detected 3 Warning Signs with Legg Mason Inc $LM.
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Legg Mason Inc (NYSE:LM)
EV-to-EBIT
12.26 (As of Today)

EV/EBIT ratio is calculated as enterprise value divided by its Earnings Before Interest and Taxes (EBIT). As of today, Legg Mason Inc's enterprise value is $4,556 Mil. Legg Mason Inc's earnings before interest and taxes (EBIT) for the trailing twelve months (TTM) ended in Dec. 2016 was $372 Mil. Therefore, Legg Mason Inc's EV/EBIT ratio for today is 12.26.

LM' s EV-to-EBIT Range Over the Past 10 Years
Min: -202.4   Max: 277
Current: 12.26

-202.4
277

During the past 13 years, the highest EV/EBIT Ratio of Legg Mason Inc was 277.00. The lowest was -202.40. And the median was 11.10.

LM's EV-to-EBIT is ranked lower than
51% of the 1295 Companies
in the Global Asset Management industry.

( Industry Median: 11.90 vs. LM: 12.26 )

Joel Greenblatt calls the inversion of this ratio Earnings Yield (Joel Greenblatt). Legg Mason Inc's enterprise value for the quarter that ended in Dec. 2016 was $3,972 Mil. Legg Mason Inc's earnings before interest and taxes (EBIT) for the trailing twelve months (TTM) ended in Dec. 2016 was $372 Mil. Legg Mason Inc's Earnings Yield (Joel Greenblatt) for the quarter that ended in Dec. 2016 was 9.36%.


Definition

Legg Mason Inc's EV/EBIT for today is calculated as:

EV/EBIT=Enterprise Value (Today)/Earnings Before Interest and Taxes (EBIT) (TTM)
=4556.462/371.717
=12.26

Legg Mason Inc's current Enterprise Value is $4,556 Mil.
Legg Mason Inc's Earnings Before Interest and Taxes (EBIT) for the trailing twelve months (TTM) ended in Dec. 2016 was 21.679 (Mar. 2016 ) + 85.216 (Jun. 2016 ) + 144.359 (Sep. 2016 ) + 120.463 (Dec. 2016 ) = $372 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).

Legg Mason Inc'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 )
=371.717/3971.5249
=9.36 %

Legg Mason Inc's Enterprise Value for the quarter that ended in Dec. 2016 was $3,972 Mil.
Legg Mason Inc's Earnings Before Interest and Taxes (EBIT) for the trailing twelve months (TTM) ended in Dec. 2016 was 21.679 (Mar. 2016 ) + 85.216 (Jun. 2016 ) + 144.359 (Sep. 2016 ) + 120.463 (Dec. 2016 ) = $372 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.

Legg Mason Inc Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
ev2ebit 11.0015.11-1.289.2111.579.50-8.9511.5214.14155.77

Legg Mason Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
ev2ebit 13.7814.4414.1413.418.7829.53155.77-179.91267.0610.68
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