Free Cash Flow to The Firm (FCFF)

Applied Materials Inc., FCFF calculation

USD $ in millions

 
12 months ended Oct 29, 2017 Oct 30, 2016 Oct 25, 2015 Oct 26, 2014 Oct 27, 2013 Oct 28, 2012
Net income 3,434  1,721  1,377  1,072  256  109 
Net noncash charges 552  626  421  593  822  1,415 
Changes in operating assets and liabilities, net of amounts acquired (377) 119  (635) 135  (455) 327 
Cash provided by operating activities 3,609  2,466  1,163  1,800  623  1,851 
Cash payments for interest, net of tax1 171  129  79  68  67  32 
Capital expenditures (345) (253) (215) (241) (197) (162)
Proceeds from sale of facilities 25 
Free cash flow to the firm (FCFF) 3,435  2,342  1,027  1,652  500  1,721 
Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the Applied Materials Inc.'s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. Applied Materials Inc.'s FCFF increased from 2015 to 2016 and from 2016 to 2017.

Top


Interest Paid, Net of Tax

Applied Materials Inc., interest paid, net of tax calculation

USD $ in millions

 
12 months ended Oct 29, 2017 Oct 30, 2016 Oct 25, 2015 Oct 26, 2014 Oct 27, 2013 Oct 28, 2012
Effective Income Tax Rate (EITR)
EITR1 8.00% 14.50% 13.80% 26.00% 26.90% 65.50%
Interest Paid, Net of Tax
Cash payments for interest, before tax 186  151  92  92  92  94 
Less: Cash payments for interest, tax2 15  22  13  24  25  62 
Cash payments for interest, net of tax 171  129  79  68  67  32 

2017 Calculations

2 Cash payments for interest, tax = Cash payments for interest × EITR
= 186 × 8.00% = 15

Top


Enterprise Value to FCFF Ratio, Current

Applied Materials Inc., current EV/FCFF calculation, comparison to benchmarks

 
Selected Financial Data (USD $ in millions)
Enterprise value (EV) 47,412 
Free cash flow to the firm (FCFF) 3,435 
Ratio
EV/FCFF 13.80
Benchmarks
EV/FCFF, Competitors
Apple Inc. 18.19
Broadcom Inc. 19.48
Cisco Systems Inc. 12.20
HP Inc. 11.40
Intel Corp. 23.76
NVIDIA Corp. 51.60
Qualcomm Inc. 16.72
Texas Instruments Inc. 23.20
EV/FCFF, Sector
Technology Hardware & Equipment 19.11
EV/FCFF, Industry
Technology 21.55

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.

Top


Enterprise Value to FCFF Ratio, Historical

Applied Materials Inc., historical EV/FCFF calculation, comparison to benchmarks

 
Oct 29, 2017 Oct 30, 2016 Oct 25, 2015 Oct 26, 2014 Oct 27, 2013 Oct 28, 2012
Selected Financial Data (USD $ in millions)
Enterprise value (EV)1 53,528  35,185  21,445  28,662  20,056  12,944 
Free cash flow to the firm (FCFF)2 3,435  2,342  1,027  1,652  500  1,721 
Ratio
EV/FCFF3 15.58 15.02 20.88 17.35 40.09 7.52
Benchmarks
EV/FCFF, Competitors
Apple Inc. 17.70 11.95 9.80 12.50 10.06 12.81
Broadcom Inc. 18.68 25.32 20.50 35.59 24.38 14.96
Cisco Systems Inc. 8.85 9.16 8.20 8.07 7.62 6.26
HP Inc. 10.30 9.50 7.88 8.00 6.63 5.36
Intel Corp. 20.93 14.08 11.01 15.26 11.19
NVIDIA Corp. 37.90 13.08 11.73 11.29 6.92
Qualcomm Inc. 14.79 12.55 17.60 14.32 13.08 12.88
Texas Instruments Inc. 21.61 18.62 14.16 17.55 16.24
EV/FCFF, Sector
Technology Hardware & Equipment 16.96 12.70 10.51 12.42 10.19
EV/FCFF, Industry
Technology 18.98 15.00 13.81 14.39 12.66

2017 Calculations

3 EV/FCFF = EV ÷ FCFF
= 53,528 ÷ 3,435 = 15.58

Ratio Description The company
EV/FCFF Enterprise value to free cash flow to the firm is whole company valuation indicator. Applied Materials Inc.'s EV/FCFF ratio declined from 2015 to 2016 but then slightly increased from 2016 to 2017.

Top