Stock Analysis on Net
Stock Analysis on Net

Amazon.com Inc. (NASDAQ:AMZN)

Enterprise Value to FCFF (EV/FCFF) 

Microsoft Excel

Free Cash Flow to The Firm (FCFF)

Amazon.com Inc., FCFF calculation

US$ in millions

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12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Net income 33,364  21,331  11,588  10,073  3,033 
Net noncash charges 32,574  31,252  29,364  21,693  15,574 
Changes in operating assets and liabilities (19,611) 13,481  (2,438) (1,043) (173)
Net cash provided by operating activities 46,327  66,064  38,514  30,723  18,434 
Cash paid for interest on debt and finance leases, net of tax1 1,416  1,347  1,263  1,104  421 
Purchases of property and equipment (61,053) (40,140) (16,861) (13,427) (11,955)
Proceeds from property and equipment sales and incentives 5,657  5,096  4,172  2,104  1,897 
Property and equipment acquired under finance leases (7,061) (11,588) (13,723) (10,615) (9,637)
Free cash flow to the firm (FCFF) (14,714) 20,779  13,365  9,889  (840)

Based on: 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), 10-K (reporting date: 2017-12-31).

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Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the Amazon.com Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. Amazon.com Inc. FCFF increased from 2019 to 2020 but then decreased significantly from 2020 to 2021.

Interest Paid, Net of Tax

Amazon.com Inc., interest paid, net of tax calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Effective Income Tax Rate (EITR)
EITR1 12.56% 11.84% 16.99% 10.63% 20.20%
Interest Paid, Net of Tax
Cash paid for interest on debt and finance leases, before tax 1,619  1,528  1,522  1,235  528 
Less: Cash paid for interest on debt and finance leases, tax2 203  181  259  131  107 
Cash paid for interest on debt and finance leases, net of tax 1,416  1,347  1,263  1,104  421 

Based on: 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), 10-K (reporting date: 2017-12-31).

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2 2021 Calculation
Cash paid for interest on debt and finance leases, tax = Cash paid for interest on debt and finance leases × EITR
= 1,619 × 12.56% = 203

Enterprise Value to FCFF Ratio, Current

Amazon.com Inc., current EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Selected Financial Data (US$ in millions)
Enterprise value (EV) 1,129,133 
Free cash flow to the firm (FCFF) (14,714)
Valuation Ratio
EV/FCFF —
Benchmarks
EV/FCFF, Competitors1
Bed Bath & Beyond Inc. —
Booking Holdings Inc. 23.48
Dollar Tree Inc. 59.35
Home Depot Inc. 22.02
Lowe’s Cos. Inc. 15.73
Target Corp. 14.80
Ulta Beauty Inc. 22.64
EV/FCFF, Sector
Retailing 67.66
EV/FCFF, Industry
Consumer Discretionary 53.66

Based on: 10-K (reporting date: 2021-12-31).

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

Amazon.com Inc., historical EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 1,582,224  1,645,118  996,679  799,780  700,407 
Free cash flow to the firm (FCFF)2 (14,714) 20,779  13,365  9,889  (840)
Valuation Ratio
EV/FCFF3 — 79.17 74.57 80.88 —
Benchmarks
EV/FCFF, Competitors4
Bed Bath & Beyond Inc. 22.88 2.75 4.07 6.05 8.97
Booking Holdings Inc. 36.39 — 15.02 17.37 20.89
Dollar Tree Inc. 14.07 21.99 22.84 25.44 17.67
Home Depot Inc. 20.22 19.11 21.30 21.33 23.23
Lowe’s Cos. Inc. 14.88 20.95 18.88 19.78 17.63
Target Corp. 11.33 14.93 17.80 10.10 9.54
Ulta Beauty Inc. 24.08 11.61 31.43 35.41 65.76
EV/FCFF, Sector
Retailing 88.76 50.58 37.76 35.23 49.63
EV/FCFF, Industry
Consumer Discretionary 68.32 50.26 31.63 29.70 48.52

Based on: 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), 10-K (reporting date: 2017-12-31).

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3 2021 Calculation
EV/FCFF = EV ÷ FCFF
= 1,582,224 ÷ -14,714 = —

4 Click competitor name to see calculations.