The EV/EBITDA of G4S Plc is 9.01
EV/EBITDA is enterprise value divided by earnings before interest, tax, depreciation, and amortization. It is a measure of how expensive a stock is and is more frequently valid for comparisons across companies than the price to earnings ratio. It measures the price (in the form of enterprise value) an investor pays for the benefit of the company’s cash flow (in the form of EBITDA).
= enterprise value / EBITDA
Price to earnings ratios are impacted by a company's choice of capital structure - companies which raise money via debt will have lower P/Es (and therefore look cheaper) than companies that raise an equivalent amount of money by issuing shares, even though the two companies might have equivalent enterprise values. A sample case is when a company with debt were to raise money by issuing shares of stock, and then used the money to pay off the debt, this company's P/E ratio would shoot up because of the increased number of shares - although nothing about the fundamental value of the business has changed. EV / EBITDA is unaffected by capital structure as enterprise value includes the value of debt, and EBITDA is available to all investors (debt and equity) as it excludes interest payments on that debt. It is ideal for analysts and potential investors looking to compare companies within the same industry.
G4S plc, together with its subsidiaries, provides security and related services in Africa, the Americas, Asia, Europe, and the Middle East. The company offers software tools, including evidence based risk assessment, incident management, and travel advisory systems, such as RISK360; and proprietary security systems comprising symmetry connect access control and visitor management systems. It also provides custody, detention, rehabilitation, and care services; automated cash solutions for retailers, automated bulk-teller solution for banks, and mobile banking services, as well as G4S Pay, a retail cash solution; and security advice, risk mitigation strategies, secure support, and integrated solutions. The company serves corporates and industrials, government, financial institutions, private energy/utilities, and ports and airports, as well as the retail, transport and logistics, and leisure and tourism sectors. G4S plc was founded in 1901 and is based in London, the United Kingdom.