EV/EBITDA multiples can be used to benchmark or determine the potential acquisition price (where Enterprise Value= Net Debt + Market Equity Value). What is the implied enterprise value for Whole Foods using the industry average EV/EBITDA for fiscal year 2016? Use the data from Exhibit for a top down EBITDA calculation (Starting from EBIT not Net Income). Assumptions: Depreciation & Amortization in fiscal 2016 of $498 million, net debt at fiscal 2016 year end of $300 million, EV/EBITDA grocery industry average multiple of 7x.

a. $10.7 bln

b. $9.6 bln

c. $13.7 bln

d. $13.4 bln

(in $ millions except as stated) Whole Amazon Wal-Mart Costco Kroger Foods Net sales 135,987 485,873 15,724 115,337 118,719 Cost of sales 88,265 361,256 88,785 10,313 102,901 Gross profit 47,722 124,617 26,552 5,411 15,818 Operating expenses 43,536 27,284 101,917 23,090 4,458 12,146 of which, SG&A: 101,853 20,750 3,462 4,391 12,068 Operating income Interest and taxes 22,764 4,186 3,672 870 1,041 2,371 3,937 435 1,151 290 Net income 13,643 2,350 1,975 507 Receivables 10,557 1,649 5,818 6,561 1,252 5,835 242 Payables Inventory Invested capital 26,075 13,711 41,433 7,612 307 43,046 8,969 517 129,186 21,058 67,844 18,118 4,513 Total assets 6,341 198,825 83,402 33,163 36,505 118,290 64,117 Total liabilities 20,831 29,795 3,117 2,300,000 87,000 218,000 443,000 341,400 Number of employees 11,695 456 715 2,796 N/A Number of stores 17,800 103,200 178,000 1,164,000 N/A Total retail square footage ('000) Same store sales growth U.S. grocery market share (%) 4.0% -2.5% 1.0% 1.4% N/A 1.7% 5.1% 0.8% 8.9% 17.3% 14.75 6.41 12.99 -34.84 Cash conversion cycle (days) Accounts payable (days) Inventory turnover (x) Return on assets (%) 8.25 28.44 11.19 23.54 104.07 41.53 17.72 7.39 11.75 11.71 8.03 10.94% 11.78% 5.84% 9.19% 11.20% 13.3% 7.4% 13.4% 10.9% 10.9% Return on invested capital (%) 16.52% 19.15% 26.14% 9.94% 20.52% SG&A/Sales (%) Gross margin (%) Operating expenses/Sales (%) Free operating cash flow/Sales (%) 34.4% 13.3% 35.1% 23.0% 25.6% 32.0% 10.2% 20.0% 21.0% 28.4% 7.75% 2.99% 3.34% 4.56% 0.93% 4.90 4.38 2.05 1.55 5.33 Earnings per share ($) 12/31/16 1/28/17 1/31/17 8/26/16 9/25/16 Data for fiscal year ending