Why in this example they are not adding Non controlling interest while Calc EV?
Calculating EV/EBITDA
- Colgate-Palmolive (CL) provides a variety of household products. Exhibit 18 presents the company’s consolidated balance sheet as of 31 December 2018.
Exhibit 18:
Colgate-Palmolive Condensed Consolidated Balance Sheet (in Millions except Par Values; Unaudited)
Assets Current assets: Cash and cash equivalents $726 Accounts receivable, net 1,400 Inventories 1,250 Other current assets 417 Total current assets 3,793 Property and equipment, net 3,881 Goodwill and other intangible assets, net 4,167 Other non-current assets 320 Total assets $12,161 Source: Company financial report.
Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $1,222 Accrued income taxes 411 Other accruals 1,696 Current portion of long-term debt 0 Notes and loans payable 12 Total current liabilities 3,341 Long-term debt 6,354 Other non-current liabilities 2,269 Total liabilities $11,964 Shareholders’ equity: Preference stock — Common stock outstanding—863 million shares 1,466 Additional paid-in capital 2,204 Accumulated comprehensive income (loss) (4,191) Retained earnings 21,615 Treasury stock—common shares at cost (21,196) Noncontrolling interests 299 Total shareholders’ equity 197 Total liabilities and shareholders’ equity $12,161 This financial statement is audited because US companies are required to have audits only for their annual financial statements. Quarterly statements are labeled as unaudited.
From CL’s financial statements, the income statement and statement of cash flows for the year ended 31 December 2018 provided the following items (in millions):
Item Source Year Ended 31 December 2018 Net income Income statement $2,400 Interest expense (net of interest income) Income statement 143 Income tax provision Income statement 906 Depreciation and amortization Statement of cash flows 511 The company’s share price as of 15 February 2019 was $66.48. Based on the above information, calculate EV/EBITDA.
I think, there is a mistake in this example.
Yes, Also they have taken wrong amount of non current liability in EV calculation.