Cadence Design Systems Inc., FCFF calculation

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 28, 2019	Dec 29, 2018
Net income	848,952)	695,955)	590,644)	988,979)	345,777)
Net noncash charges	305,397)	299,205)	329,695)	(265,689)	280,933)
Changes in operating assets and liabilities, net of effect of acquired businesses	87,545)	105,798)	(15,417)	6,310)	(21,959)
Net cash provided by operating activities	1,241,894)	1,100,958)	904,922)	729,600)	604,751)
Cash paid for interest, net of tax¹	17,109)	14,515)	18,394)	14,095)	21,177)
Purchases of property, plant and equipment	(123,215)	(65,298)	(94,813)	(74,605)	(61,503)
Purchases of intangible assets	(1,000)	(1,583)	—)	—)	—)
Free cash flow to the firm (FCFF)	1,134,788)	1,048,592)	828,503)	669,090)	564,425)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29).

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Item	Description	The company
FCFF	Free cash flow to the firm is the cash flow available to the Cadence Design Systems Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Cadence Design Systems Inc. FCFF increased from 2020 to 2021 and from 2021 to 2022.

Cadence Design Systems Inc., interest paid, net of tax calculation

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 28, 2019	Dec 29, 2018
Effective Income Tax Rate (EITR)
EITR¹	19.00%	9.00%	7.00%	21.00%	8.00%
Interest Paid, Net of Tax
Cash paid for interest, before tax	21,122)	15,950)	19,778)	17,842)	23,018)
Less: Cash paid for interest, tax²	4,013)	1,436)	1,384)	3,747)	1,841)
Cash paid for interest, net of tax	17,109)	14,515)	18,394)	14,095)	21,177)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29).

¹ See details »

² 2022 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= 21,122 × 19.00% = 4,013

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Cadence Design Systems Inc., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in thousands)
Enterprise value (EV)	65,440,527)
Free cash flow to the firm (FCFF)	1,134,788)
Valuation Ratio
EV/FCFF	57.67
Benchmarks
EV/FCFF, Competitors¹
Accenture PLC	20.24
Adobe Inc.	30.22
International Business Machines Corp.	14.29
Intuit Inc.	37.49
Microsoft Corp.	53.29
Oracle Corp.	36.54
Palo Alto Networks Inc.	38.65
Salesforce Inc.	28.14
ServiceNow Inc.	56.37
Synopsys Inc.	56.04
EV/FCFF, Sector
Software & Services	44.03
EV/FCFF, Industry
Information Technology	43.50

Based on: 10-K (reporting date: 2022-12-31).

¹ Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.

Cadence Design Systems Inc., historical EV/FCFF calculation, comparison to benchmarks

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 28, 2019	Dec 29, 2018
Selected Financial Data (US$ in thousands)
Enterprise value (EV)¹	50,550,711)	36,757,249)	36,566,539)	19,642,003)	16,020,111)
Free cash flow to the firm (FCFF)²	1,134,788)	1,048,592)	828,503)	669,090)	564,425)
Valuation Ratio
EV/FCFF³	44.55	35.05	44.14	29.36	28.38
Benchmarks
EV/FCFF, Competitors⁴
Accenture PLC	16.99	24.76	17.90	18.49	17.18
Adobe Inc.	20.82	33.61	40.43	40.48	31.36
International Business Machines Corp.	16.47	13.10	9.35	12.86	—
Intuit Inc.	32.85	48.64	37.90	33.30	27.69
Microsoft Corp.	32.31	38.37	33.99	26.37	23.99
Oracle Corp.	31.60	16.36	14.99	14.03	11.11
Palo Alto Networks Inc.	29.29	32.74	26.50	20.44	22.33
Salesforce Inc.	35.97	44.91	39.63	41.21	—
ServiceNow Inc.	40.86	60.13	83.74	67.96	—
Synopsys Inc.	30.82	38.59	42.88	33.32	37.07
EV/FCFF, Sector
Software & Services	29.16	31.90	27.10	23.26	—
EV/FCFF, Industry
Information Technology	27.01	27.93	24.12	19.69	—

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29).

¹ See details »

² See details »

³ 2022 Calculation
EV/FCFF = EV ÷ FCFF
= 50,550,711 ÷ 1,134,788 = 44.55

⁴ Click competitor name to see calculations.

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Valuation ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	Cadence Design Systems Inc. EV/FCFF ratio decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.

Cadence Design Systems Inc. (NASDAQ:CDNS)

Enterprise Value to FCFF (EV/FCFF)

Free Cash Flow to The Firm (FCFF)

Interest Paid, Net of Tax

Enterprise Value to FCFF Ratio, Current

Enterprise Value to FCFF Ratio, Historical