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GuruFocus has detected 9 Warning Signs with Microsoft Corp $MSFT.
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Microsoft Corp (NAS:MSFT)
EV-to-EBIT
21.24 (As of Today)

EV/EBIT ratio is calculated as enterprise value divided by its Earnings Before Interest and Taxes (EBIT). As of today, Microsoft Corp's enterprise value is $463,474 Mil. Microsoft Corp's earnings before interest and taxes (EBIT) for the trailing twelve months (TTM) ended in Dec. 2016 was $21,821 Mil. Therefore, Microsoft Corp's EV/EBIT ratio for today is 21.24.

MSFT' s EV-to-EBIT Range Over the Past 10 Years
Min: 4.8   Max: 23.7
Current: 21.24

4.8
23.7

During the past 13 years, the highest EV/EBIT Ratio of Microsoft Corp was 23.70. The lowest was 4.80. And the median was 10.20.

MSFT's EV-to-EBIT is ranked lower than
59% of the 1205 Companies
in the Global Software - Infrastructure industry.

( Industry Median: 17.49 vs. MSFT: 21.24 )

Joel Greenblatt calls the inversion of this ratio Earnings Yield (Joel Greenblatt). Microsoft Corp's enterprise value for the quarter that ended in Dec. 2016 was $442,531 Mil. Microsoft Corp's earnings before interest and taxes (EBIT) for the trailing twelve months (TTM) ended in Dec. 2016 was $21,821 Mil. Microsoft Corp's Earnings Yield (Joel Greenblatt) for the quarter that ended in Dec. 2016 was 4.93%.


Definition

Microsoft Corp's EV/EBIT for today is calculated as:

EV/EBIT=Enterprise Value (Today)/Earnings Before Interest and Taxes (EBIT) (TTM)
=463473.859/21821
=21.24

Microsoft Corp's current Enterprise Value is $463,474 Mil.
Microsoft Corp's Earnings Before Interest and Taxes (EBIT) for the trailing twelve months (TTM) ended in Dec. 2016 was 5283 (Mar. 2016 ) + 3892 (Jun. 2016 ) + 5762 (Sep. 2016 ) + 6884 (Dec. 2016 ) = $21,821 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).

Microsoft Corp'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 )
=21821/442531.2
=4.93 %

Microsoft Corp's Enterprise Value for the quarter that ended in Dec. 2016 was $442,531 Mil.
Microsoft Corp's Earnings Before Interest and Taxes (EBIT) for the trailing twelve months (TTM) ended in Dec. 2016 was 5283 (Mar. 2016 ) + 3892 (Jun. 2016 ) + 5762 (Sep. 2016 ) + 6884 (Dec. 2016 ) = $21,821 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.

Microsoft Corp Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
ev2ebit 13.729.549.376.706.129.068.249.8714.8516.11

Microsoft Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
ev2ebit 11.3511.449.7214.8515.0521.6823.0616.1118.3020.28
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