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GuruFocus has detected 3 Warning Signs with CarMax Inc $KMX.
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CarMax Inc (NYSE:KMX)
EV-to-EBIT
22.69 (As of Today)

EV/EBIT ratio is calculated as enterprise value divided by its Earnings Before Interest and Taxes (EBIT). As of today, CarMax Inc's enterprise value is $24,118 Mil. CarMax Inc's earnings before interest and taxes (EBIT) for the trailing twelve months (TTM) ended in Feb. 2017 was $1,063 Mil. Therefore, CarMax Inc's EV/EBIT ratio for today is 22.69.

KMX' s EV-to-EBIT Range Over the Past 10 Years
Min: 10.2   Max: 38.1
Current: 22.69

10.2
38.1

During the past 13 years, the highest EV/EBIT Ratio of CarMax Inc was 38.10. The lowest was 10.20. And the median was 19.30.

KMX's EV-to-EBIT is ranked lower than
75% of the 1383 Companies
in the Global Auto & Truck Dealerships industry.

( Industry Median: 13.17 vs. KMX: 22.69 )

Joel Greenblatt calls the inversion of this ratio Earnings Yield (Joel Greenblatt). CarMax Inc's enterprise value for the quarter that ended in Feb. 2017 was $24,171 Mil. CarMax Inc's earnings before interest and taxes (EBIT) for the trailing twelve months (TTM) ended in Feb. 2017 was $1,063 Mil. CarMax Inc's Earnings Yield (Joel Greenblatt) for the quarter that ended in Feb. 2017 was 4.40%.


Definition

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

EV/EBIT=Enterprise Value (Today)/Earnings Before Interest and Taxes (EBIT) (TTM)
=24118.058/1062.821
=22.69

CarMax Inc's current Enterprise Value is $24,118 Mil.
CarMax Inc's Earnings Before Interest and Taxes (EBIT) for the trailing twelve months (TTM) ended in Feb. 2017 was 293.781 (May. 2016 ) + 275.64 (Aug. 2016 ) + 234.732 (Nov. 2016 ) + 258.668 (Feb. 2017 ) = $1,063 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).

CarMax Inc's Earnings Yield (Joel Greenblatt) for the quarter that ended in Feb. 2017 is calculated as:

Earnings Yield (Joel Greenblatt) (Q: Feb. 2017 )=EBIT (TTM)/Enterprise Value (Q: Feb. 2017 )
=1062.821/24171.225
=4.40 %

CarMax Inc's Enterprise Value for the quarter that ended in Feb. 2017 was $24,171 Mil.
CarMax Inc's Earnings Before Interest and Taxes (EBIT) for the trailing twelve months (TTM) ended in Feb. 2017 was 293.781 (May. 2016 ) + 275.64 (Aug. 2016 ) + 234.732 (Nov. 2016 ) + 258.668 (Feb. 2017 ) = $1,063 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.

CarMax Inc Annual Data

Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15Feb16Feb17
ev2ebit 14.3322.1110.1718.6516.5319.6821.3623.2418.7422.74

CarMax Inc Quarterly Data

Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16Feb17
ev2ebit 22.2923.2423.6221.3120.9818.7420.3721.8721.7022.74
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