Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Apple Inc., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
The financial data reveals a consistent upward trend in both cash generated by operating activities and free cash flow to the firm (FCFF) over the examined six-year period. This indicates a strengthening operational efficiency and cash generation capability.
- Cash generated by operating activities
- The cash generated from operations has grown steadily from 69,391 million US dollars in 2019 to 118,254 million US dollars in 2024. The growth was particularly notable between 2019 and 2021, with a significant increase of approximately 50% over these two years. Although growth continued post-2021, there was a moderate decline from 2022 to 2023, before rising again in 2024, suggesting some fluctuations but an overall strong upward momentum.
- Free cash flow to the firm (FCFF)
- The FCFF also displayed a positive trajectory, increasing from 61,775 million US dollars in 2019 to 108,807 million US dollars in 2024. Like operating cash flow, FCFF showed robust growth initially, with the largest increments seen up until 2022. However, a small dip is observed in 2023, corresponding with a similar decline in operating cash, followed by a recovery in 2024. This pattern reflects a stable capacity to generate free cash after accounting for capital expenditures.
Overall, the data depicts a strong financial position with effective operational performance and consistent free cash flow generation. The brief dip around 2023 could warrant further examination, though the rapid recovery in the subsequent year demonstrates resilience and potential effective management of resources.
Interest Paid, Net of Tax
Apple Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
2 2024 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= 0 × 24.10% = 0
The analysis of the financial data over the six-year period reveals several noteworthy trends and variations.
- Effective Income Tax Rate (EITR)
- The effective income tax rate showed a general trend of decrease from 15.9% in 2019 to a low of 13.3% in 2021, suggesting a period of favorable tax conditions or tax planning effectiveness. However, a notable increase followed in 2022, reaching 16.2%, before slightly declining to 14.7% in 2023. The most significant change is observed in 2024, with the tax rate rising sharply to 24.1%, indicating either a change in tax regulations, reduced tax benefits, or increased taxable income subject to higher rates.
- Cash Paid for Interest, Net of Tax
- Cash paid for interest shows a declining trend from $2,879 million in 2019 to $2,330 million in 2021, suggesting a reduction in debt-related expenses or improved interest management. This trend slightly reversed in 2022 with a slight increase to $2,401 million, followed by a more substantial increase to $3,244 million in 2023, indicating either higher debt levels or rising interest rates. The data for 2024 is not provided, leaving the latest trend incomplete.
Overall, the effective income tax rate demonstrates volatility with a significant upward movement in the most recent year, while interest payments initially decreased but escalated notably towards 2023. These trends could have important implications for the company’s profitability and cash flow management strategies.
Enterprise Value to FCFF Ratio, Current
Apple Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 3,051,923) |
| Free cash flow to the firm (FCFF) | 108,807) |
| Valuation Ratio | |
| EV/FCFF | 28.05 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Arista Networks Inc. | 29.15 |
| Cisco Systems Inc. | 26.16 |
| Dell Technologies Inc. | 33.16 |
| Super Micro Computer Inc. | — |
| EV/FCFF, Sector | |
| Technology Hardware & Equipment | 27.93 |
| EV/FCFF, Industry | |
| Information Technology | 47.79 |
Based on: 10-K (reporting date: 2024-09-28).
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
Apple Inc., historical EV/FCFF calculation, comparison to benchmarks
| Sep 28, 2024 | Sep 30, 2023 | Sep 24, 2022 | Sep 25, 2021 | Sep 26, 2020 | Sep 28, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Enterprise value (EV)1 | 3,411,822) | 2,797,951) | 2,550,236) | 2,520,606) | 1,872,970) | 1,112,797) | |
| Free cash flow to the firm (FCFF)2 | 108,807) | 102,828) | 113,844) | 95,283) | 75,935) | 61,775) | |
| Valuation Ratio | |||||||
| EV/FCFF3 | 31.36 | 27.21 | 22.40 | 26.45 | 24.67 | 18.01 | |
| Benchmarks | |||||||
| EV/FCFF, Competitors4 | |||||||
| Arista Networks Inc. | 33.39 | 39.01 | 89.98 | 38.47 | 29.00 | — | |
| Cisco Systems Inc. | 19.55 | 10.98 | 13.55 | 15.50 | 10.47 | 12.58 | |
| Dell Technologies Inc. | 13.99 | 34.88 | 6.45 | 9.28 | 8.76 | — | |
| Super Micro Computer Inc. | — | 21.06 | — | 25.04 | — | 3.79 | |
| EV/FCFF, Sector | |||||||
| Technology Hardware & Equipment | 30.34 | 24.95 | 20.82 | 23.63 | 21.09 | — | |
| EV/FCFF, Industry | |||||||
| Information Technology | 40.33 | 34.40 | 26.74 | 27.56 | 23.97 | — | |
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= 3,411,822 ÷ 108,807 = 31.36
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibits a consistent upward trend over the analyzed periods. Starting at approximately $1.11 trillion in 2019, it increased substantially to over $3.41 trillion by 2024. Notably, there is a marked acceleration in growth between 2019 and 2021, followed by steady increments through 2024.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm increases steadily from about $61.8 billion in 2019 to a peak of $113.8 billion in 2022. This growth is indicative of improving operational cash generation capacity. However, in 2023, a noticeable decline occurs, with FCFF falling to approximately $102.8 billion, before recovering somewhat to $108.8 billion in 2024, suggesting some volatility in cash flow generation towards the end of the period.
- EV to FCFF Ratio
- The EV/FCFF ratio shows a general increasing trend from 18.01 in 2019 to 31.36 in 2024, indicating that enterprise value is growing faster than free cash flow over time. This ratio peaks in 2021 at 26.45, dips in 2022 to 22.4 as FCFF hits its highest point, and then rises again in subsequent years, reaching the highest level in 2024. The increasing ratio could imply elevated market valuation relative to cash flow, potentially reflecting higher growth expectations or shifts in perceived risk.