Below is an Below is an EBT calculator, or Earnings Before Tax Calculator. Enter a company's net income and tax expense to compute its EBT. Calculator. Enter a company's net income and tax expense to compute its EBT.
EBT, or Earnings Before Tax, merely adjusts a company's net income for the tax it paid. Tax is a real charge, but backing out tax and comparing a company over time, or companies across tax regimes, can normalize for some effects of a company's organization.
Generally, though, EBIT and EBITDA are more popular earnings adjustments. Respectively, they add back Interest Expenses, and Depreciation and Amortization expenses.
The formula for EBT is:
EBT=net\ income+tax\ expense
Where:
Below is an EBITDARM calculator, or Earnings Before Interest, Tax, Depreciation, Amortization, Rental Costs, and Management Costs Calculator. Enter a company's net income, interest expenses in the period, tax expenses, depreciation expenses, rent, management fees, and amortization expenses to compute its EBITDARM.
EBITDARM, or Earnings Before Interest, Tax, Depreciation, Amortization, Rent, and Management Costs, is an extension of EBITDA to normalize for company choices in rent and management costs. Like EBITDAR with rent, companie can choose to in-house any management functions they need, or outsource them and take charges. For very specialized company comparisons, EBITDARM can better compare companies which took a different path to a business model.
Again, like EBITDAR, it's much less popular than EBIT and EBITDA.
The formula for EBITDARM is:
EBITDARM=net\ income+interest\ expense+\\\ tax\ expense+depreciation+\\amortization+rental\ costs\\+management\ costs
Where:
Below is an EBITDAR calculator, or Earnings Before Interest, Tax, Depreciation, Amortization, and Rental Costs Calculator. Enter a company's net income, interest expenses in the period, tax expenses, depreciation expenses, rent, and amortization expenses to compute its EBITDAR.
EBITDAR, or Earnings Before Interest, Tax, Depreciation, Amortization, and Rent, is an extension of EBITDA to add rental charges. As some companies choose to own property and others don't, in some cases it lets you compare companies with different asset policies – as one company pays rent and another depreciates buildings.
EBITDAR is a specialized metric, and interest, rent, and taxes are all real charges. While useful when evaluating a complete company for purchase in some situations, it's much less popular than EBIT and EBITDA. EBITDARM goes a step further and adds back management fees – and is even further removed from earnings.
The formula for EBITDAR is:
EBITDAR=net\ income+interest\ expense+\\\ tax\ expense+depreciation+\\amortization+rental\ costs
Where:
Below is an EBITDA calculator, or Earnings Before Interest, Tax, Depreciation, and Amortization Calculator. Enter a company's net income, interest expenses in the period, tax expenses, depreciation expenses, and amortization expenses to compute its EBITDA.
EBITDA, or Earnings Before Interest, Tax, Depreciation, and Amortization, is an alternative measure of earnings that extends EBIT to add back amortization and depreciation charges. As depreciation and amortization are non-cash writedowns of, respectively, tangible and intangible assets, EBITDA removes them to get closer to cash flows.
As with EBITA, EBITDA is a better approximation of a company's current cash flows available than net income. However, as you add-back more adjustments to net income, your measure becomes more and more of a fiction – and manipulable. However, EBITDA is extremely popular as an alternative earnings metric and cash flow proxy, and it's also used like EV/EBIT in its own enterprise value ratio EV/EBITDA. Additionally, interest and tax expenses are "real" outflows so many analyses should really start first on the cash flow statement.
Additionally, EBITDA is very popular as an adjusted earning metric when evaluating purchasing whole companies – either buying out public companies or buying private companies on multiples. New management can optimize their capital structure and organization to move the lever on tax costs and interest charges, and they can also adjust the pace of purchases of intangible and tangible assets.
The formula for EBITDA is:
EBITDA=net\ income+interest\ expense+\\\ tax\ expense+depreciation+amortization
Where:
Below is an EBITA calculator, or Earnings Before Interest, Tax, and Amortization Calculator. Enter a company's net income, interest expenses in the period, tax expenses, and amortization expenses to compute its EBITA.
EBITA, or Earnings Before Interest, Tax, and Amortization, is an alternative measure of earnings that goes a step beyond EBIT and adds back a company's accounting expense for amortization. Amortization is an accounting fiction, in the sense that amortization isn't tied to cash moving out of the company, but (here) instead a mark down on an intangible asset.
The more 'letters' you add to earnings, the less reliable your earnings number. Some companies, especially serial acquirers and conglomerates, will have significant continuing amortization charges as they continually engage in M&A.
Both EBITA and EBITDA – which also adds back depreciation on tangible assets – better approximate a company's current cash flows. Like EBIT, all the earnings adjustments attempt to normalize a company's earnings for capitalization structures and management styles. However, they can be misleading if you don't carefully evaluate the inputs to the assumptions.
The formula for EBITA is:
EBITA=net\ income+interest\ expense+\\\ tax\ expense+\ amortization
Where:
Below is an EBIT calculator, or Earnings Before Interest and Tax Calculator. Enter a company's net income, interest expenses in the period, and tax expense to compute its EBIT.
EBIT, or Earnings Before Interest and Tax, is an alternative measure of earnings that adjusts for a company's capitalization and tax jurisdiction. It is useful in comparing a company's performance across time, tax policy, and interest rates. It's also helpful when evaluating the business to see if there is any efficiency in changing how it is capitalized and organized.
In many companies, operating profits (sometimes rendered profits from operations or income from operations) are equivalent to EBIT. However, companies that break out investment gains, provisions for taxes, special expenses, and other charges and benefits may not match from both directions – by definition, those charges or additions aren't from operations.
As EBIT considers interest expenses, it's usually tied to enterprise value based metrics, as opposed to market capitalization based ones. EV/EBIT, or enterprise value to EBIT ratio is a common relative valuation metric (used in a similar way to price to earnings or P/E).
EBIT has less adjustments than the commonly used EBITDA, which adds back depreciation and amortization. EV/EBITDA is also a common relative value ratio.
The formula for EBIT is:
EBIT=net\ income+interest\ expense+tax\ expense
Where:
Below is an enterprise value calculator. Enter a company's market capitalization, its total debt, and any cash or cash equivalents it holds to compute an enterprise value
Enterprise value is a fairly exhaustive measure of a company's value which includes both equity and debt in its count. Enterprise value adds all outstanding liabilities to a company's market capitalization and nets out the cash a company holds to derive a more accurate value of a firm's worth.
Market capitalization only measures the value of a company's equity, neglecting company liabilities. Additionally, some companies hold significant amounts of cash that could readily be paid out to shareholders or invested in growth or acquisitions or buybacks, which needs to be valued somehow.
Enterprise value is closer to the market's implied current purchase price of a firm. While only equity captures the earnings upside of a firm, debt generally has first dibs in any default scenarios. EV better captures how many companies finance their activities by properly accounting for liabilities.
The enterprise value formula is:
Enterprise\ Value =market\ capitalization+liabilities-cash\ \&\ cash\ equivalents
Where:
On this page is a shareholder yield calculator. Enter the number of shares outstanding currently and twelve months ago to compute the company's buyback yield, plus the security price and dividends paid per share to compute the dividend yield. The tool then adds them together to return the total shareholder yield.
Shareholder yield is the total amount a company returns to investors in the form of dividends, plus the effects of share buybacks which leave investors as larger owners of a firm. By adding buyback yield and dividend yield, you calculate the total shareholder yield.
For limitations, read the individual entries for dividend yield and buyback yield.
The shareholder yield formula is the composition of the buyback yield and dividend yield, or:
shareholder\ yield=\frac{shares\ outstanding\ before-shares\ outstanding\ now}{shares\ outstanding\ before}~\\~\\+\frac{annual\ dividend}{asset\ price}Where:
On this page is a buyback yield calculator. Enter the number of shares outstanding currently and twelve months ago to compute the company's buyback yield (or the effect of dilution).
The buyback yield is the implied yield computed by a company's efforts in shrinking the number of shares outstanding. While dividend yield is more visible, when a company buys back stock it leaves all remaining shareholders better off since they now have a greater percentage ownership of a company.
Both the buyback yield and the dividend yield together make up the shareholder yield.
The dividend yield formula is:
buyback\ yield=\frac{shares\ outstanding\ before-shares\ outstanding\ now}{shares\ outstanding\ before}Where:
While buybacks – save those that cause liquidity crunches – are great to see from a shareholder perspective, there are many reasons they could be a sub-optimal use of cash. Other than the rare case a buyback eliminates a company's needed liquidity, buybacks fall short when:
(There also isn't as much pressure on companies to continue buybacks as there is to pay dividends – regular dividend payers tend to attract a particular crowd of investors, with no comparable audience for firms that buy back.)
Let's look at the three issues with buybacks.
A company has only four ways to use earnings – buy back shares, pay dividends, reinvest, or purchase other companies (and yes, technically, they can also retain earnings to use later). So any time a company chooses to pursue one at the expense of others, it was a sub-optimal capital allocation.
While mergers and acquisitions gone wrong attract more attention, many companies buy back stock that later trades in the market for substantially lower prices.
Many companies issue their employees equity of some form as a part of compensation. While companies declare options and equity pools in advance, continuing grants mean the company needs to allocate more and more future shares to compensation.
Some companies will announce flashy buyback plans simultaneous with employee equity vests, but don't purchase offsetting vesting equity. As some investors treat stock-based compensation as a non-cash expense, it's crucial to net out any extra dilution before crediting a company with buyback yield (looking at snapshots of share count will do this.) And, certainly, once you pair a buyback with stock-based compensation, you're now monetizing SBC.
A similar issue applies to stock acquisitions and secondary offerings of shares, preferred shares, convertibles, and the like – always look at the share snapshot and consider what the company is getting for its dilution. Talent and new acquisitions can be worth it, but they aren't free.
Valuation measures look better with fewer shares outstanding, especially any common ratios that use a per-share price. While that's an unavoidable consequence – or bonus – of any buyback, it's important to note that the growth in earnings, sales, gross profit, or so on per share is just math and not necessarily a change in the company's prospects. As with the sub-optimal use of funds section, those earnings now can't be used to reinvest in other areas of growth.
Again, it's not necessarily bad if you understand the mechanism behind the improvement in valuation. Famously, Autozone was able to buy back shares at a good price and grow their share price substantially faster than their business metrics would support (although it needs to be said, the business metrics were also excellent.)
On this page is a cash flow yield calculator. Enter the current price per share of a company plus its cash flow per share (free cash flow, operating cash flow, or other cash flow metric) to compute its cash flow yield.
Cash flow yield is the percentage of cash flow a company generates based upon the price paid. Generally, you compute it using the cash flow per share and the price per share, but it is mathematically equivalent to using all a company's cash flow plus the total market capitalization.
Price is always the current market price. Cash flow can be any manner of cash flow metrics, from the operating cash flow on the balance sheet to free cash flow measures that add or subtract certain charges.
Cash flow yield is the inverse of the price to cash flow ratio. Multiples are easy to compare company to company, but the yield form can be easier to compare to alternative measures of payout, such as dividend yield or various interest measures.
The cash flow yield formula is:
cash flow\ yield=\frac{cash\ flow\ per\ share}{price\ per\ share}Where: