Net Present Value analysis of proposed strategy’s new cash flow
Mild_tutor
NPV_and_EPS_EBIT.docx|
EBAY NSP/EBIT/NVP Analysis |
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USD $ in millions |
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12 months ended |
Dec 31, 2017 |
Dec 31, 2016 |
Dec 31, 2015 |
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Net income (loss) |
-1,016 |
7,266 |
1,725 |
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Less: Loss from discontinued operations, net of income taxes |
-4 |
-19 |
-222 |
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Add: Income tax expense |
3,288 |
-3,634 |
459 |
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Earnings before tax (EBT) |
2,276 |
3,651 |
2,406 |
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Add: Interest expense |
292 |
225 |
144 |
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Earnings before interest and tax (EBIT) |
2,568 |
3,876 |
2,550 |
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Add: Depreciation and amortization |
676 |
682 |
687 |
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Earnings before interest, tax, depreciation and amortization (EBITDA) |
3,244 |
4,558 |
3,237 |
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Input Data |
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Need for Capital |
1,000 |
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EBIT Range |
2568-3876 |
Estimated EBIT range |
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Interest Rate |
2.90% |
recent interest rate |
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Tax Rate |
35.54% |
recent tax rate |
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Stock Price |
$38.03 |
Stock price |
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Shares Outstanding |
1,087,042,601 |
Shares outstanding |
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Input Data |
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100% Debt Financing |
100% Common Stock |
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50% Debt-50% stock |
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EBIT |
2568 |
3876 |
2568 |
3867 |
2568 |
3876 |
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Interest |
74 |
74 |
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37 |
37 |
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EBT |
2494 |
3802 |
2568 |
3876 |
2531 |
3839 |
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Taxes |
913 |
1351 |
912 |
1378 |
890 |
1364 |
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EAT |
1608 |
2451 |
1656 |
2489 |
1641 |
2475 |
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Shares outstanding |
1087 |
1087 |
1090 |
1090 |
1090 |
1090 |
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EPS |
1.479 |
2.254 |
1.519 |
2.283 |
1.504 |
2.27 |
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NPV |
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Discounted Rate |
10% |
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Initial Investment |
1,000 |
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Year 1 Operating |
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Year 1 Investing |
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Year 1 Financing |
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NPV Equals |
1461 |
