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GuruFocus has detected 2 Warning Signs with Southwest Airlines Co $LUV.
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Southwest Airlines Co (NYSE:LUV)
EV-to-EBIT
9.14 (As of Today)

EV/EBIT ratio is calculated as enterprise value divided by its Earnings Before Interest and Taxes (EBIT). As of today, Southwest Airlines Co's enterprise value is $33,088 Mil. Southwest Airlines Co's earnings before interest and taxes (EBIT) for the trailing twelve months (TTM) ended in Dec. 2016 was $3,622 Mil. Therefore, Southwest Airlines Co's EV/EBIT ratio for today is 9.14.

LUV' s EV-to-EBIT Range Over the Past 10 Years
Min: -55.1   Max: 154.6
Current: 9.16

-55.1
154.6

During the past 13 years, the highest EV/EBIT Ratio of Southwest Airlines Co was 154.60. The lowest was -55.10. And the median was 10.70.

LUV's EV-to-EBIT is ranked lower than
57% of the 122 Companies
in the Global Airlines industry.

( Industry Median: 10.83 vs. LUV: 9.16 )

Joel Greenblatt calls the inversion of this ratio Earnings Yield (Joel Greenblatt). Southwest Airlines Co's enterprise value for the quarter that ended in Dec. 2016 was $30,764 Mil. Southwest Airlines Co's earnings before interest and taxes (EBIT) for the trailing twelve months (TTM) ended in Dec. 2016 was $3,622 Mil. Southwest Airlines Co's Earnings Yield (Joel Greenblatt) for the quarter that ended in Dec. 2016 was 11.77%.


Definition

Southwest Airlines Co's EV/EBIT for today is calculated as:

EV/EBIT=Enterprise Value (Today)/Earnings Before Interest and Taxes (EBIT) (TTM)
=33088.300/3622
=9.14

Southwest Airlines Co's current Enterprise Value is $33,088 Mil.
Southwest Airlines Co's Earnings Before Interest and Taxes (EBIT) for the trailing twelve months (TTM) ended in Dec. 2016 was 835 (Mar. 2016 ) + 1325 (Jun. 2016 ) + 637 (Sep. 2016 ) + 825 (Dec. 2016 ) = $3,622 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).

Southwest Airlines Co'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 )
=3622/30763.504
=11.77 %

Southwest Airlines Co's Enterprise Value for the quarter that ended in Dec. 2016 was $30,764 Mil.
Southwest Airlines Co's Earnings Before Interest and Taxes (EBIT) for the trailing twelve months (TTM) ended in Dec. 2016 was 835 (Mar. 2016 ) + 1325 (Jun. 2016 ) + 637 (Sep. 2016 ) + 825 (Dec. 2016 ) = $3,622 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.

Southwest Airlines Co Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
ev2ebit 7.0421.0628.2610.6614.919.909.7814.817.848.49

Southwest Airlines Co Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
ev2ebit 11.4114.8112.048.148.027.847.756.136.498.49
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