EBIT Multiple Stock Value Calculator

A simple stock price calculator using EBIT multiples

Red fields are required inputs

EBIT Multiples Valuation Method
  How to use:
Enter values in the yellow boxes.
Make sure to keep your denominations consistent. E.g. use millions for rev & shares outstanding.
Do not use millions for revenue and thousands for shares outstanding.
(For Each Operating Segment) (1)
Conservative Normal Case Aggressive  
Normalized Revenue Estimate (2)
Projected Normalized Operating Margin (3)
Operating Income Estimate (EBIT)
Valuation Multiple (4)
Estimate Value of Operating Segment
Cash & Equiv on Balance Sheet
Total Value of business + cash
Less Total Debt
Less Off Balance Sheet Debt (5)
Less Net Pension/Retirement/Workers Comp
  Estimated Fair Value of Equity  
Shares Outstanding
Estimated Fair Value per Share  
Current Price
Margin of Safety
Price/Intrinsic Value Ratio (6)

How to Use Tutorial Article

Read the accompanying article using DELL as an example of how to use this EBIT calculator to the fullest.

Calculator Input Explanations

(1) For Each Operating Segment:

EBIT multiple calculation can be used for sum of the parts valuation.

Perform the same step for each part of the operating business and then sum it up to get the total value.

(2) Normalized Revenue Estimate

To get a normalized value, take the average or median across multiple years.

(3) Projected Normalized Operating Margin

Enter the operating margin for each scenario.

(4) Valuation Multiple

Enter the EBIT multiple that you wish to use for each scenario. Look at comparable industry and competitor levels if you are unsure.

(5) Less Off Balance Sheet Debt

These are liabilities that are not found in the balance sheet. It can be found in the footnotes of the annual reports.

A quick way to search for this is to do a find for the term "off balance sheet" or "off-balance sheet" in the filings.

(6) Price/Intrinsic Value Ratio

The lower the better. Simply price divided by the calculated intrinsic value of equity.