Stock Analysis on Net

Alphabet Inc. (NASDAQ:GOOG)

Enterprise Value to FCFF (EV/FCFF)

Microsoft Excel

Free Cash Flow to The Firm (FCFF)

Alphabet Inc., FCFF calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net income 73,795 59,972 76,033 40,269 34,343
Net noncash charges 31,796 33,758 17,142 23,028 19,358
Changes in assets and liabilities, net of effects of acquisitions (3,845) (2,235) (1,523) 1,827 819
Net cash provided by operating activities 101,746 91,495 91,652 65,124 54,520
Cash paid for interest, net of amounts capitalized, net of tax1 265 300 290 113 86
Interest capitalized, net of tax2 156 108 137 183 144
Purchases of property and equipment (32,251) (31,485) (24,640) (22,281) (23,548)
Free cash flow to the firm (FCFF) 69,916 60,418 67,439 43,139 31,202

Based on: 10-K (reporting date: 2023-12-31), 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).

Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the Alphabet Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. Alphabet Inc. FCFF decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Interest Paid, Net of Tax

Alphabet Inc., interest paid, net of tax calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Effective Income Tax Rate (EITR)
EITR1 13.90% 15.90% 16.20% 16.20% 13.90%
Interest Paid, Net of Tax
Cash paid for interest, net of amounts capitalized, before tax 308 357 346 135 100
Less: Cash paid for interest, net of amounts capitalized, tax2 43 57 56 22 14
Cash paid for interest, net of amounts capitalized, net of tax 265 300 290 113 86
Interest Costs Capitalized, Net of Tax
Interest capitalized, before tax 181 128 163 218 167
Less: Interest capitalized, tax3 25 20 26 35 23
Interest capitalized, net of tax 156 108 137 183 144

Based on: 10-K (reporting date: 2023-12-31), 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).

1 See details »

2 2023 Calculation
Cash paid for interest, net of amounts capitalized, tax = Cash paid for interest, net of amounts capitalized × EITR
= 308 × 13.90% = 43

3 2023 Calculation
Interest capitalized, tax = Interest capitalized × EITR
= 181 × 13.90% = 25


Enterprise Value to FCFF Ratio, Current

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

Microsoft Excel
Selected Financial Data (US$ in millions)
Enterprise value (EV) 1,792,770
Free cash flow to the firm (FCFF) 69,916
Valuation Ratio
EV/FCFF 25.64
Benchmarks
EV/FCFF, Competitors1
Charter Communications Inc. 19.99
Comcast Corp. 16.72
Meta Platforms Inc. 27.51
Netflix Inc. 36.29
Walt Disney Co. 38.92
EV/FCFF, Sector
Media & Entertainment 25.95
EV/FCFF, Industry
Communication Services 23.39

Based on: 10-K (reporting date: 2023-12-31).

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

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

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 1,666,699 1,248,790 1,832,285 1,273,801 879,497
Free cash flow to the firm (FCFF)2 69,916 60,418 67,439 43,139 31,202
Valuation Ratio
EV/FCFF3 23.84 20.67 27.17 29.53 28.19
Benchmarks
EV/FCFF, Competitors4
Charter Communications Inc. 20.51 17.68 16.46 20.62 24.57
Comcast Corp. 17.60 17.93 15.77 20.50 18.00
Meta Platforms Inc. 26.42 24.09 15.40 29.48 25.83
Netflix Inc. 33.81 77.11 335.37 95.41
Walt Disney Co. 31.55 90.23 78.66 63.77 143.18
EV/FCFF, Sector
Media & Entertainment 24.48 23.09 24.10 30.50 31.28
EV/FCFF, Industry
Communication Services 22.23 22.97 30.26 25.42 24.63

Based on: 10-K (reporting date: 2023-12-31), 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).

1 See details »

2 See details »

3 2023 Calculation
EV/FCFF = EV ÷ FCFF
= 1,666,699 ÷ 69,916 = 23.84

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. EV/FCFF ratio decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.