Enterprise Value to FCFF (EV/FCFF)
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- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Analysis of Solvency Ratios
- Analysis of Reportable Segments
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Equity (ROE) since 2008
- Current Ratio since 2008
- Analysis of Debt
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Free Cash Flow to The Firm (FCFF)
Activision Blizzard Inc., FCFF calculation
US$ in millions
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: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Net Cash Provided by Operating Activities
- The net cash generated from operating activities exhibited an overall upward trend from 2018 through 2021. Starting at $1,790 million in 2018, the figure increased modestly to $1,831 million in 2019, followed by a more significant rise to $2,252 million in 2020, and further climbing to a peak of $2,414 million in 2021. However, in 2022 there was a decline to $2,220 million, indicating a reduction in operational cash inflows compared to the previous year.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm closely mirrored the trend in operating cash flows during the period under review. It increased steadily from $1,782 million in 2018 to $1,794 million in 2019, followed by a significant jump to $2,243 million in 2020 and further growth to $2,427 million in 2021. Similar to operating cash flows, FCFF decreased in 2022 to $2,220 million, reflecting a contraction after several years of growth.
- General Observations
- Both key cash flow metrics demonstrate consistent growth from 2018 to 2021, suggesting improvements in operational efficiency and cash generation ability. The decline observed in 2022 may warrant further investigation to assess underlying causes, such as potential changes in operational performance, capital expenditures, or market conditions affecting cash generation. Nonetheless, the levels remain relatively strong and appear to be stable around the $2.2 billion mark.
Interest Paid, Net of Tax
Activision Blizzard Inc., interest paid, net of tax calculation
US$ in millions
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: 2019-12-31), 10-K (reporting date: 2018-12-31).
2 2022 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= × =
The effective income tax rate (EITR) displayed a fluctuating trend over the five-year period. It began at 18% in 2018, declined sharply to 8% in 2019, then increased again to 16% in 2020. In the subsequent years, the rate slightly decreased to 15% in 2021 and continued to decline to 13% in 2022. This pattern indicates variability in the company’s tax expense relative to its pre-tax earnings, with a notable reduction from the initial year to the most recent year.
Cash paid for interest, net of tax, showed an overall declining trend from 2018 to 2020, decreasing from 123 million USD to 69 million USD. However, this downward trend reversed in 2021, when the cash outflow for interest increased to 93 million USD, followed by a marginal decrease to 91 million USD in 2022. The fluctuations suggest changing borrowing costs or shifts in debt levels impacting interest payments over time.
Enterprise Value to FCFF Ratio, Current
Activision Blizzard Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Alphabet Inc. | |
| Comcast Corp. | |
| Meta Platforms Inc. | |
| Netflix Inc. | |
| Take-Two Interactive Software Inc. | |
| Walt Disney Co. | |
| EV/FCFF, Sector | |
| Media & Entertainment | |
| EV/FCFF, Industry | |
| Communication Services | |
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.
Enterprise Value to FCFF Ratio, Historical
Activision Blizzard Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| EV/FCFF, Sector | ||||||
| Media & Entertainment | ||||||
| EV/FCFF, Industry | ||||||
| Communication Services | ||||||
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: 2019-12-31), 10-K (reporting date: 2018-12-31).
3 2022 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited a notable upward trend from 2018 to 2020, increasing from $30,634 million to $69,660 million. This peak in 2020 represents more than a doubling of the value observed at the start of the period. However, after 2020, a decline is observable with EV decreasing to $56,646 million in 2021 and further to $52,063 million in 2022. Despite this decrease from the peak, the 2022 EV remains significantly higher than the 2018 baseline.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm demonstrates a generally positive growth trajectory across the five-year span. Starting at $1,782 million in 2018, FCFF increased modestly to $1,794 million in 2019, followed by a more pronounced rise to $2,243 million in 2020. This upward momentum continued into 2021 with FCFF reaching $2,427 million, before experiencing a slight decline to $2,220 million in 2022. Overall, the cash flow shows resilience, growing substantially from 2018 levels despite the minor dip at the end of the period.
- EV/FCFF Ratio
- The ratio of enterprise value to free cash flow to the firm presents a fluctuating pattern reflecting changes in both EV and FCFF. Initially, the ratio increased dramatically from 17.19 in 2018 to peak at 31.06 in 2020. This peak aligns with the year of highest EV, suggesting that increases in enterprise valuation outpaced growth in cash flow during this period. Following 2020, the ratio decreased to 23.34 in 2021 and remained relatively stable at 23.45 in 2022, indicating that although enterprise value declined, it did so in a manner roughly proportional to FCFF changes. This stabilization suggests a recalibration of valuation relative to cash flow after the spike observed in 2020.