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Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Alphabet Inc. (NASDAQ:GOOG)

Enterprise Value to FCFF (EV/FCFF)

Intermediate level

Free Cash Flow to The Firm (FCFF)

Alphabet Inc., FCFF calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net income 40,269  34,343  30,736  12,662  19,478 
Net noncash charges 23,028  19,358  12,327  15,183  13,258 
Changes in assets and liabilities, net of effects of acquisitions 1,827  819  4,908  9,246  3,300 
Net cash provided by operating activities 65,124  54,520  47,971  37,091  36,036 
Cash paid for interest, net of amounts capitalized, net of tax1 113  86  60  70  68 
Interest capitalized, net of tax2 183  144  80  40  — 
Purchases of property and equipment (22,281) (23,548) (25,139) (13,184) (10,212)
Free cash flow to the firm (FCFF) 43,139  31,202  22,972  24,016  25,892 

Based on: 10-K (filing date: 2021-02-03), 10-K (filing date: 2020-02-04), 10-K (filing date: 2019-02-05), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-03).

1, 2 See details »

Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the Alphabet Inc.’s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. Alphabet Inc.’s FCFF increased from 2018 to 2019 and from 2019 to 2020.

Interest Paid, Net of Tax

Alphabet Inc., interest paid, net of tax calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Effective Income Tax Rate (EITR)
EITR1 16.20% 13.90% 13.30% 17.20% 19.30%
Interest Paid, Net of Tax
Cash paid for interest, net of amounts capitalized, before tax 135  100  69  84  84 
Less: Cash paid for interest, net of amounts capitalized, tax2 22  14  9  14  16 
Cash paid for interest, net of amounts capitalized, net of tax 113  86  60  70  68 
Interest Costs Capitalized, Net of Tax
Interest capitalized, before tax 218  167  92  48  — 
Less: Interest capitalized, tax3 35  23  12  8  — 
Interest capitalized, net of tax 183  144  80  40  — 

Based on: 10-K (filing date: 2021-02-03), 10-K (filing date: 2020-02-04), 10-K (filing date: 2019-02-05), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-03).

1 See details »

2 2020 Calculation
Cash paid for interest, net of amounts capitalized, tax = Cash paid for interest, net of amounts capitalized × EITR
= 135 × 16.20% = 22

3 2020 Calculation
Interest capitalized, tax = Interest capitalized × EITR
= 218 × 16.20% = 35

Enterprise Value to FCFF Ratio, Current

Alphabet Inc., current EV/FCFF calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Selected Financial Data (US$ in millions)
Enterprise value (EV) 1,255,734 
Free cash flow to the firm (FCFF) 43,139 
Valuation Ratio
EV/FCFF 29.11
Benchmarks
EV/FCFF, Competitors1
Adobe Inc. 38.95
Autodesk Inc. 40.85
Facebook Inc. 32.34
International Business Machines Corp. 9.79
Intuit Inc. 44.01
Microsoft Corp. 37.88
Oracle Corp. 16.65
salesforce.com inc. 44.67
ServiceNow Inc. 65.51
EV/FCFF, Sector
Software & Computer Services 30.41
EV/FCFF, Industry
Technology 27.93

Based on: 10-K (filing date: 2021-02-03).

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

Alphabet Inc., historical EV/FCFF calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 1,273,848  879,545  691,549  653,437  471,768 
Free cash flow to the firm (FCFF)2 43,139  31,202  22,972  24,016  25,892 
Valuation Ratio
EV/FCFF3 29.53 28.19 30.10 27.21 18.22
Benchmarks
EV/FCFF, Competitors4
Adobe Inc. 40.43 40.48 31.36 33.45 25.29
Autodesk Inc. 23.35 98.38 — 144.92 33.22
Facebook Inc. 29.31 25.57 28.30 29.70 30.05
International Business Machines Corp. 9.35 12.86 12.27 12.20 14.18
Intuit Inc. 37.90 33.30 27.69 25.66 31.97
Microsoft Corp. 33.65 26.19 23.86 15.52 14.60
Oracle Corp. 14.99 14.03 11.11 15.07 11.24
salesforce.com inc. 39.53 41.15 40.55 33.55 34.92
ServiceNow Inc. 82.97 71.37 71.10 52.84 246.84
EV/FCFF, Sector
Software & Computer Services 28.35 25.22 24.09 21.26 17.80
EV/FCFF, Industry
Technology 25.34 21.26 19.17 19.36 15.65

Based on: 10-K (filing date: 2021-02-03), 10-K (filing date: 2020-02-04), 10-K (filing date: 2019-02-05), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-03).

1 See details »

2 See details »

3 2020 Calculation
EV/FCFF = EV ÷ FCFF
= 1,273,848 ÷ 43,139 = 29.53

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/FCFF Enterprise value to free cash flow to the firm is whole company valuation indicator. Alphabet Inc.’s EV/FCFF ratio decreased from 2018 to 2019 but then increased from 2019 to 2020 not reaching 2018 level.