.Enterprise Value to FCFF (EV/FCFF)
Difficulty: Intermediate
Free Cash Flow to The Firm (FCFF)
Amazon.com Inc., FCFF calculation
USD $ in millions
| 12 months ended | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|---|
| | Net income (loss) | |||||
| | Net noncash charges | |||||
| | Changes in operating assets and liabilities | |||||
| | Net cash provided by operating activities | |||||
| | Cash paid for interest on long-term debt, capital and finance lease obligations, net of tax1 | |||||
| | Purchases of property and equipment, including internal-use software and website development, net | |||||
| | Proceeds from property and equipment incentives | |||||
| | Property and equipment acquired under capital leases and build-to-suit leases | |||||
| | Free cash flow to the firm (FCFF) |
| Item | Description | The company |
|---|---|---|
| FCFF | Free cash flow to the firm is the cash flow available to the Amazon.com Inc.'s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. | Amazon.com Inc.'s FCFF increased from 2015 to 2016 but then declined significantly from 2016 to 2017. |
Interest Paid, Net of Tax
Amazon.com Inc., interest paid, net of tax calculation
USD $ in millions
| 12 months ended | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|---|
| Effective Income Tax Rate (EITR) | ||||||
| | EITR1 | % | % | % | % | % |
| Interest Paid, Net of Tax | ||||||
| | Cash paid for interest on long-term debt, capital and finance lease obligations, before tax | |||||
| | Less: Cash paid for interest on long-term debt, capital and finance lease obligations, tax2 | |||||
| | Cash paid for interest on long-term debt, capital and finance lease obligations, net of tax | |||||
2017 Calculations
2 Cash paid for interest on long-term debt, capital and finance lease obligations, tax = Cash paid for interest on long-term debt, capital and finance lease obligations × EITR
= × % =
Enterprise Value to FCFF Ratio, Current
Amazon.com Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (USD $ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors | |
| Costco Wholesale Corp. | |
| eBay Inc. | |
| Home Depot Inc. | |
| Lowe's Cos. Inc. | |
| Netflix Inc. | |
| Target Corp. | |
| TJX Cos. Inc. | |
| Walmart Inc. | |
| EV/FCFF, Sector | |
| General Retailers | |
| EV/FCFF, Industry | |
| Consumer Services | |
If company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Amazon.com Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| | Enterprise value (EV)1 | |||||
| | Free cash flow to the firm (FCFF)2 | |||||
| Ratio | ||||||
| | EV/FCFF3 | |||||
| Benchmarks | ||||||
| EV/FCFF, Competitors | ||||||
| Costco Wholesale Corp. | ||||||
| eBay Inc. | ||||||
| Home Depot Inc. | ||||||
| Lowe's Cos. Inc. | ||||||
| Netflix Inc. | ||||||
| Target Corp. | ||||||
| TJX Cos. Inc. | ||||||
| Walmart Inc. | ||||||
| EV/FCFF, Sector | ||||||
| General Retailers | ||||||
| EV/FCFF, Industry | ||||||
| Consumer Services | ||||||
2017 Calculations
3 EV/FCFF = EV ÷ FCFF
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| EV/FCFF | Enterprise value to free cash flow to the firm is whole company valuation indicator. | Amazon.com Inc.'s EV/FCFF ratio increased from 2015 to 2016 but then declined significantly from 2016 to 2017. |
