Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Amgen Inc., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The financial information indicates fluctuations in both net cash provided by operating activities and free cash flow to the firm (FCFF) over the five-year period. Generally, FCFF closely mirrors the trends observed in operating cash flow, but with some divergence.
- Net Cash from Operations
- Net cash provided by operating activities increased from US$9,261 million in 2021 to US$9,721 million in 2022, representing a growth of approximately 5.0%. A subsequent decrease was noted in 2023, with operating cash flow falling to US$8,471 million. However, a substantial recovery occurred in 2024, reaching US$11,490 million, before moderating slightly to US$9,958 million in 2025.
- Free Cash Flow to the Firm (FCFF)
- FCFF exhibited a similar pattern to operating cash flow. It rose from US$9,436 million in 2021 to US$9,855 million in 2022, a gain of roughly 4.5%. FCFF then decreased to US$9,411 million in 2023. A significant increase was observed in 2024, with FCFF reaching US$13,321 million, followed by a decline to US$10,591 million in 2025. The 2024 peak in FCFF is notably higher than any other year in the observed period.
- Relationship between Operating Cash Flow and FCFF
- The difference between net cash from operations and FCFF remains relatively small throughout the period, suggesting that capital expenditure and other non-cash items impacting FCFF are consistently managed. The correlation between the two metrics is strong, indicating that changes in operating performance are the primary driver of FCFF fluctuations. The increase in FCFF in 2024 appears to be largely attributable to the increase in operating cash flow during that year.
The observed volatility in both metrics suggests potential sensitivity to underlying business conditions or strategic investment decisions. Further investigation into the factors driving the 2023 dip and the 2024 surge would be beneficial for a more comprehensive understanding of the company’s cash flow dynamics.
AI Ask an analyst for more
Interest Paid, Net of Tax
Amgen Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
2 2025 Calculation
Interest paid, net of amounts capitalized, tax = Interest paid, net of amounts capitalized × EITR
= 2,900 × 14.10% = 409
The analysis reveals a notable trend in interest expense, net of tax, alongside fluctuations in the effective income tax rate over the five-year period. Interest expense, net of tax, demonstrates a significant increase from 2021 to 2024, followed by a decrease in 2025. The effective income tax rate exhibits variability throughout the period, impacting the after-tax cost of debt.
- Interest Expense Trend
- Interest expense, net of tax, increased from US$1,055 million in 2021 to US$1,070 million in 2022, representing a modest increase of approximately 1.4%. A substantial rise is then observed, with expense reaching US$2,052 million in 2023 and peaking at US$2,927 million in 2024. This represents a significant increase over the period 2021-2024. In 2025, interest expense decreased to US$2,491 million, indicating a reduction of approximately 14.9% from the 2024 level. This suggests potential debt restructuring, refinancing activities, or changes in overall debt levels.
- Effective Income Tax Rate (EITR) Trend
- The effective income tax rate fluctuated throughout the period. It began at 12.10% in 2021, decreased to 10.80% in 2022, and then increased to 14.50% in 2023. The rate decreased again to 11.30% in 2024 before rising to 14.10% in 2025. These fluctuations in the EITR would influence the actual cash outflow related to interest expense, even with consistent pre-tax interest costs.
- Relationship between Interest Expense and EITR
- The increase in interest expense from 2021 to 2024 occurred alongside variations in the effective income tax rate. While the EITR decreased in 2022, the net interest expense only saw a slight increase. The largest increase in net interest expense coincided with a higher EITR in 2023. The decrease in net interest expense in 2025 occurred with a relatively high EITR, suggesting the reduction in expense was more substantial than the impact of the tax rate.
The observed trends suggest a dynamic financial landscape, with significant changes in interest-related expenses and a fluctuating tax environment. Further investigation into the underlying drivers of these changes, such as debt issuance, repayment, and tax planning strategies, would be beneficial.
AI Ask an analyst for more
Enterprise Value to FCFF Ratio, Current
Amgen Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 233,302) |
| Free cash flow to the firm (FCFF) | 10,591) |
| Valuation Ratio | |
| EV/FCFF | 22.03 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| AbbVie Inc. | 21.53 |
| Bristol-Myers Squibb Co. | 10.49 |
| Danaher Corp. | 26.59 |
| Eli Lilly & Co. | 93.58 |
| Gilead Sciences Inc. | 18.22 |
| Johnson & Johnson | 27.89 |
| Merck & Co. Inc. | 23.91 |
| Pfizer Inc. | 18.01 |
| Regeneron Pharmaceuticals Inc. | 19.08 |
| Thermo Fisher Scientific Inc. | 27.01 |
| Vertex Pharmaceuticals Inc. | 33.54 |
| EV/FCFF, Sector | |
| Pharmaceuticals, Biotechnology & Life Sciences | 26.90 |
| EV/FCFF, Industry | |
| Health Care | 25.54 |
Based on: 10-K (reporting date: 2025-12-31).
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
Amgen Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 244,493) | 204,539) | 209,123) | 157,794) | 149,300) | |
| Free cash flow to the firm (FCFF)2 | 10,591) | 13,321) | 9,411) | 9,855) | 9,436) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 23.08 | 15.35 | 22.22 | 16.01 | 15.82 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| AbbVie Inc. | 23.29 | 20.05 | 14.89 | 12.15 | 13.18 | |
| Bristol-Myers Squibb Co. | 10.84 | 9.94 | 9.14 | 13.87 | 10.52 | |
| Danaher Corp. | 29.01 | 28.93 | 36.34 | 25.74 | 28.25 | |
| Eli Lilly & Co. | 107.04 | 200.96 | 655.43 | 59.17 | 38.39 | |
| Gilead Sciences Inc. | 19.36 | 14.50 | 13.41 | 13.58 | 8.42 | |
| Johnson & Johnson | 28.52 | 18.16 | 19.30 | 23.80 | 21.25 | |
| Merck & Co. Inc. | 25.30 | 13.24 | 37.84 | 19.09 | 23.27 | |
| Pfizer Inc. | 18.08 | 15.33 | 32.24 | 9.15 | 8.40 | |
| Regeneron Pharmaceuticals Inc. | 20.01 | 19.97 | 25.33 | 23.31 | 9.81 | |
| Thermo Fisher Scientific Inc. | 28.42 | 26.13 | 28.85 | 31.61 | 33.14 | |
| Vertex Pharmaceuticals Inc. | 36.94 | — | 29.45 | 16.68 | 22.47 | |
| EV/FCFF, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 28.89 | 23.59 | 27.29 | 18.08 | 16.12 | |
| EV/FCFF, Industry | ||||||
| Health Care | 27.34 | 24.05 | 25.98 | 18.66 | 17.80 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= 244,493 ÷ 10,591 = 23.08
4 Click competitor name to see calculations.
The Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio exhibits fluctuations over the observed period. Enterprise Value generally increased, while Free Cash Flow to the Firm (FCFF) demonstrated variability. This resulted in a corresponding fluctuation in the EV/FCFF ratio.
- Enterprise Value
- Enterprise Value increased from US$149,300 million in 2021 to US$157,794 million in 2022, representing a growth of approximately 5.7%. A more substantial increase was observed between 2022 and 2023, reaching US$209,123 million, a rise of roughly 32.3%. A slight decrease occurred in 2024 to US$204,539 million, followed by a further increase to US$244,493 million in 2025, representing a 19.5% increase from 2024.
- Free Cash Flow to the Firm (FCFF)
- FCFF showed a modest increase from US$9,436 million in 2021 to US$9,855 million in 2022, a growth of approximately 4.5%. FCFF decreased to US$9,411 million in 2023. A significant increase was then recorded in 2024, with FCFF reaching US$13,321 million. However, FCFF decreased again in 2025 to US$10,591 million.
- EV/FCFF Ratio
- The EV/FCFF ratio was 15.82 in 2021 and 16.01 in 2022, indicating a relatively stable valuation. The ratio increased substantially to 22.22 in 2023, reflecting the larger increase in Enterprise Value relative to FCFF. A decrease to 15.35 was observed in 2024, driven by the significant increase in FCFF. The ratio then increased again in 2025 to 23.08, reflecting the increase in Enterprise Value and the decrease in FCFF.
The fluctuations in the EV/FCFF ratio suggest changing investor perceptions of the firm’s value relative to its cash flow generating ability. The increase in 2023 and 2025 may indicate increased investor confidence or expectations, while the decrease in 2024 could be attributed to improved cash flow generation. The volatility in FCFF warrants further investigation to understand the underlying drivers of these changes.
AI Ask an analyst for more