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Microsoft Corporation (NAS:MSFT)
EV/EBITDA
8.11 (As of Today)

EV/EBITDA ratio is calculated as enterprise value divided by its EBITDA. As of today, Microsoft Corporation's enterprise value is $271,144 Mil. Microsoft Corporation's earnings before depreciation and amortization for the trailing twelve months (TTM) ended in Dec. 2013 was $32,767 Mil. Therefore, Microsoft Corporation's EV/EBITDA ratio for today is 8.11.

EV/EBITDA (Enterprise value/EBITDA) is a valuation multiple used in finance and investment to measure the value of a company. This important multiple is often used in conjunction with, or as an alternative to, the P/E Ratio to determine the fair market value of a company.

As of today, Microsoft Corporation's stock price is $40.01. Microsoft Corporation's earnings per share for the trailing twelve months (TTM) ended in Dec. 2013 was $2.71. Therefore, Microsoft Corporation's P/E Ratio for today is 14.90.

The "classic" EV/EBITDA ratio is much better in capturing debt and net cash than the P/E Ratio.


Definition

Microsoft Corporation's EV/EBITDA for today is calculated as:

EV/EBITDA=Enterprise Value (Today)/Earnings Before Depreciation and Amortization (TTM)
=271143.956/32767
=8.27

Microsoft Corporation's current Enterprise Value is $271,144 Mil.
Microsoft Corporation's Earnings Before Depreciation and Amortization for the trailing twelve months (TTM) ended in Dec. 2013 was 8765 (Mar. 2013 ) + 7248 (Jun. 2013 ) + 7480 (Sep. 2013 ) + 9274 (Dec. 2013 ) = $32,767 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

EV/EBITDA (Enterprise value/EBITDA) is a valuation multiple used in finance and investment to measure the value of a company. This important multiple is often used in conjunction with, or as an alternative to, the P/E Ratio to determine the fair market value of a company.

Microsoft Corporation's P/E Ratio for today is calculated as:

P/E Ratio=Share Price (Today)/Earnings Per Share (TTM)
=40.01/2.707
=14.78

Microsoft Corporation's share price for today is $40.01.
Microsoft Corporation's Earnings Per Share for the trailing twelve months (TTM) ended in Dec. 2013 was 0.72 (Mar. 2013 ) + 0.587 (Jun. 2013 ) + 0.62 (Sep. 2013 ) + 0.78 (Dec. 2013 ) = $2.71.

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Study has found that the companies with the lowest EV/EBITDA outperforms companies measured as cheap by other ratios such as P/E Ratio.

Please read Which price ratio outperforms the enterprise multiple?


Related Terms

Enterprise Value, Earnings Before Depreciation and Amortization, P/E Ratio


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Microsoft Corporation Annual Data

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
ev2ebitda 24.4914.8111.7112.728.768.306.065.588.017.24

Microsoft Corporation Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
ev2ebitda 5.145.626.898.018.237.157.077.246.597.62
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