Merger and Aquisition Class Note

All the Calculated Numbers refer to the EXCEL spread sheet attached, please check.

Multiples Source

Closing Price on Sep 4 $111.22 Yahoo Finance

Shares Outstanding 1,918M Quarterly Report

Equity Value $220,327M Calculated

Total Debt $10,024M Balance Sheet

Enterprise Value $230,351M Calculated

Revenue per Share $128.25 Calculated

EV/EBITDA 3.19 Calculated

This multiple indicates the total value of Chevron in capital-structure neutral way. It can be compared directly with other companies', even they may have significantly different amount of debt and equity. And a lower value, which is the case for Chevron, means the company may be undervalued. However, the result of EV/EBITDA relies heavily on the accounting method of EBITDA, which can cause the inaccurate in evaluation

EV/Revenue 0.91 Calculated

This measurement provides the investor a view of how much they need to pay in order to gain the sales. This is an alternative of EV/EBITDA. But this one ignores the crucial factor of profit making ability, which is the cost, and therefore is less attractive than EV/EBITDA.

P/E 8.1 Calculated

The P/E ratio is a multiple to evaluate the fairness of a stock price. It is clear by showing the price for each unit of net income for the last 12 months. A higher figure means the relative high price compared to other similar companies in the industry. The S&P 500's trailing 12-month P/E ratio of energy industry currently stands at 11.43.