Enterprise Value to FCFF (EV/FCFF)
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Free Cash Flow to The Firm (FCFF)
Amgen Inc., FCFF calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2020-12-31).
- Operating Cash Flow
- The net cash provided by operating activities showed a fluctuating trend over the five-year period. The value initially decreased from 10,497 million USD in 2020 to 9,261 million USD in 2021, indicating a contraction in cash generation from core operations during that year. This was followed by a modest recovery to 9,721 million USD in 2022, though the figure declined again in 2023 to 8,471 million USD, representing the lowest point in the timeframe. However, in 2024 there was a significant rebound, with cash from operations rising sharply to 11,490 million USD, the highest level reported in the five years.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm exhibited a generally similar pattern to operating cash flows, albeit at consistently higher values. FCFF decreased from 10,961 million USD in 2020 to 9,436 million USD in 2021, corroborating a drop in free cash available after capital expenditures. It then increased modestly to 9,855 million USD in 2022 and remained relatively stable at 9,411 million USD in 2023. The most notable change occurred in 2024, where FCFF surged to 13,321 million USD, indicating enhanced cash generation and potentially improved capital expenditure management or increased operating inflows.
- Overall Trends and Insights
- Both operating cash flow and free cash flow to the firm displayed a dip during the early years, with the lowest points in 2023, followed by a strong recovery in 2024. The recovery in 2024 exceeded prior years' levels, suggesting a significant operational improvement or favorable changes in the company's cash management strategies. The parallel movement between operating cash flow and FCFF suggests that capital expenditures remained proportionate to operating inflows over the period, with no extreme volatility observed between these metrics. The data reflects the company's resilience and capacity to generate cash despite some fluctuations during the interim years.
Interest Paid, Net of Tax
Amgen Inc., interest paid, net of tax calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2020-12-31).
2 2024 Calculation
Interest paid, tax = Interest paid × EITR
= × =
- Effective Income Tax Rate (EITR)
- The effective income tax rate exhibits fluctuations over the observed five-year period. Initially, it increased from 10.7% in 2020 to 12.1% in 2021, indicating a higher tax burden. This was followed by a decrease to 10.8% in 2022, suggesting some relief or tax planning effects. In 2023, the rate rose significantly to 14.5%, marking the peak in the period and implying increased tax expenses or reduced tax benefits. By 2024, it decreased again to 11.3%, indicating some stabilization but still remaining elevated compared to the starting year.
- Interest Paid, Net of Tax
- Interest paid net of tax shows a clear upward trend throughout the period. From 2020 to 2022, the values remained relatively stable, fluctuating slightly around the 1050 to 1070 million USD range. However, in 2023 there was a drastic increase, nearly doubling to 2052 million USD. This significant rise continued into 2024, reaching 2927 million USD. This trend suggests a substantial increase in interest expenses, potentially driven by higher debt levels or increased interest rates in the market environment.
Enterprise Value to FCFF Ratio, Current
Amgen Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| AbbVie Inc. | |
| Bristol-Myers Squibb Co. | |
| Danaher Corp. | |
| Eli Lilly & Co. | |
| Gilead Sciences Inc. | |
| Johnson & Johnson | |
| Merck & Co. Inc. | |
| Pfizer Inc. | |
| Regeneron Pharmaceuticals Inc. | |
| Thermo Fisher Scientific Inc. | |
| Vertex Pharmaceuticals Inc. | |
| EV/FCFF, Sector | |
| Pharmaceuticals, Biotechnology & Life Sciences | |
| EV/FCFF, Industry | |
| Health Care | |
Based on: 10-K (reporting date: 2024-12-31).
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, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| AbbVie Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| EV/FCFF, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| EV/FCFF, Industry | ||||||
| Health Care | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited moderate fluctuations over the analyzed period. It initially decreased from approximately $159 billion at the end of 2020 to around $149 billion by the end of 2021. Subsequently, it rose slightly to nearly $158 billion in 2022, followed by a more pronounced increase to about $209 billion by the end of 2023. In the latest period, EV decreased marginally to approximately $204.5 billion. This pattern suggests variability with a significant upward adjustment during 2023, potentially reflecting changes in market valuation or capital structure.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm demonstrated some volatility throughout the years. It began at around $10.96 billion in 2020, then declined to roughly $9.44 billion in 2021. The figure slightly improved to approximately $9.86 billion in 2022 but dropped again to about $9.41 billion in 2023. In 2024, a notable increase to approximately $13.32 billion was recorded, marking the highest value in the observed timeframe. This upward shift in the latest year indicates an improvement in cash generating ability.
- EV/FCFF Ratio
- The EV/FCFF ratio exhibited an overall rising trend from 2020 through 2023, starting at 14.51 and increasing steadily to peak at 22.22 in 2023. This rise reflects a growing valuation multiple relative to free cash flow, possibly indicating increased market optimism or perceived growth prospects during this period. In 2024, the ratio declined sharply to 15.35, returning closer to earlier levels. This reversion could signal a market reassessment or improved cash flow performance relative to enterprise value.
- Summary
- Over the five-year span, enterprise value and free cash flow showed variable performance with notable inflection points in 2023 and 2024. The surge in EV in 2023 coupled with relatively flat FCFF increased the valuation multiple to a peak, whereas 2024 experienced a normalization of this multiple, driven by both a slight reduction in EV and a substantial rise in free cash flow. These dynamics indicate shifts in both market valuation and operational cash flow generation, highlighting potential changes in market conditions or company fundamentals during the period.