Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Autodesk Inc., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).
The financial performance from January 31, 2019, to January 31, 2024, is characterized by a period of rapid expansion followed by a significant contraction in the final fiscal year. Both net cash provided by operating activities and free cash flow to the firm (FCFF) exhibit a high degree of correlation, moving in tandem throughout the observed period.
- Cash Flow Growth Trajectory
- A substantial increase in cash generation is observed between 2019 and 2020, where FCFF rose from 357 million US$ to 1,411 million US$. This upward momentum continued with moderate growth through 2022, culminating in a peak in 2023, where FCFF reached its highest point at 2,100 million US$.
- Recent Performance Contraction
- A notable decline occurred in the period ending January 31, 2024. Net cash provided by operating activities dropped from 2,071 million US$ to 1,313 million US$, while FCFF decreased from 2,100 million US$ to 1,307 million US$. This represents a reversal of the growth trend established over the previous four years.
- Capital Intensity and FCFF Relationship
- The variance between net cash provided by operating activities and FCFF remains minimal across all reported years. In several instances, such as in 2023, FCFF slightly exceeded operating cash flow, suggesting a very low requirement for capital expenditures or potential inflows from the sale of productive assets. This indicates a lean capital structure relative to the volume of cash generated by operations.
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Interest Paid, Net of Tax
Autodesk Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).
2 2024 Calculation
Cash paid during the year for interest, tax = Cash paid during the year for interest × EITR
= 69 × 20.25% = 14
The financial trajectory of after-tax interest expenditures exhibits a period of relative stability followed by a significant spike and subsequent correction. Between 2019 and 2022, cash paid for interest remained consistent, with only marginal annual increases. However, a notable surge occurred in 2023, marking the peak of the observed period before costs retracted in 2024.
- Interest Expenditure Trends
- Cash outflows for interest, net of tax, demonstrated a slow upward trend from 47 million USD in 2019 to 51 million USD in 2022. A sharp increase is observed in 2023, where expenditures rose to 75 million USD, representing a 47% increase over the prior year. This peak was followed by a reduction to 55 million USD in 2024, returning the expenditure levels closer to the 2019-2022 baseline.
- Effective Income Tax Rate (EITR) Fluctuations
- The effective income tax rate showed significant volatility over the six-year period. After peaking at 27.24% in 2020, the rate declined sharply to 11.99% in 2022 and remained low at 13.00% in 2023. By 2024, the EITR returned to 20.25%, aligning closely with the 21.00% rate recorded in 2019.
- Correlation Between Tax Rates and Net Interest Outflows
- The peak in net interest payments in 2023 coincided with one of the lowest effective tax rates (13.00%), suggesting that the increase in cash outflow was driven by higher gross interest obligations rather than a reduction in tax shields. Conversely, the decrease in net interest paid in 2024 occurred as the tax rate normalized toward 20%, indicating a reduction in the underlying interest burden.
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Enterprise Value to FCFF Ratio, Current
Autodesk Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 64,314) |
| Free cash flow to the firm (FCFF) | 1,307) |
| Valuation Ratio | |
| EV/FCFF | 49.21 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Accenture PLC | 10.60 |
| Adobe Inc. | 9.16 |
| AppLovin Corp. | 21.94 |
| Cadence Design Systems Inc. | 57.59 |
| Datadog Inc. | 105.01 |
| International Business Machines Corp. | 19.45 |
| Intuit Inc. | 8.55 |
| Microsoft Corp. | 56.79 |
| Oracle Corp. | — |
| Palantir Technologies Inc. | 212.56 |
| Palo Alto Networks Inc. | 79.88 |
| Salesforce Inc. | 13.58 |
| ServiceNow Inc. | 29.48 |
| Synopsys Inc. | 61.83 |
| Workday Inc. | 14.87 |
| EV/FCFF, Sector | |
| Software & Services | 42.50 |
| EV/FCFF, Industry | |
| Information Technology | 71.05 |
Based on: 10-K (reporting date: 2024-01-31).
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
Autodesk Inc., historical EV/FCFF calculation, comparison to benchmarks
| Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | Jan 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Enterprise value (EV)1 | 47,049) | 42,998) | 41,870) | 57,203) | 33,000) | 35,094) | |
| Free cash flow to the firm (FCFF)2 | 1,307) | 2,100) | 1,515) | 1,391) | 1,411) | 357) | |
| Valuation Ratio | |||||||
| EV/FCFF3 | 36.00 | 20.48 | 27.63 | 41.13 | 23.38 | 98.38 | |
| Benchmarks | |||||||
| EV/FCFF, Competitors4 | |||||||
| Accenture PLC | 25.76 | 20.26 | 16.99 | 24.76 | 17.90 | — | |
| Adobe Inc. | 21.98 | 37.75 | 20.82 | 33.61 | 40.43 | — | |
| AppLovin Corp. | 49.47 | 20.62 | — | — | — | — | |
| Cadence Design Systems Inc. | 61.26 | 63.83 | 44.54 | 35.05 | — | — | |
| Datadog Inc. | 52.45 | 68.76 | 66.00 | 198.40 | — | — | |
| International Business Machines Corp. | 20.11 | 15.27 | 16.47 | 13.10 | — | — | |
| Intuit Inc. | 36.79 | 31.28 | 32.85 | 48.64 | — | — | |
| Microsoft Corp. | 41.70 | 39.61 | 30.26 | 36.19 | — | — | |
| Oracle Corp. | 31.24 | 35.83 | 31.60 | 16.36 | — | — | |
| Palantir Technologies Inc. | 251.61 | 69.13 | 82.97 | 66.45 | — | — | |
| Palo Alto Networks Inc. | 34.69 | 28.15 | 29.30 | 32.74 | — | — | |
| Salesforce Inc. | 29.95 | 28.41 | 35.97 | 44.91 | — | — | |
| ServiceNow Inc. | 60.21 | 56.56 | 40.87 | 60.12 | — | — | |
| Synopsys Inc. | 56.95 | 55.87 | 30.82 | 38.59 | 42.88 | — | |
| Workday Inc. | 32.57 | 33.40 | 45.74 | 57.52 | — | — | |
| EV/FCFF, Sector | |||||||
| Software & Services | 37.97 | 34.88 | 28.89 | 32.08 | — | — | |
| EV/FCFF, Industry | |||||||
| Information Technology | 39.04 | 33.99 | 26.47 | 27.37 | — | — | |
Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= 47,049 ÷ 1,307 = 36.00
4 Click competitor name to see calculations.
The analysis of the Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio reveals significant volatility between 2019 and 2024, characterized by an initial extreme valuation followed by a period of normalization and a recent upward trend.
- Enterprise Value (EV) Trends
- The enterprise value demonstrated substantial fluctuations, most notably a sharp peak in 2021 at 57,203 million US$. Following this peak, the value corrected and remained relatively stable between 41,870 million US$ and 47,049 million US$ from 2022 through 2024.
- Free Cash Flow to the Firm (FCFF) Performance
- A strong growth trajectory in cash flow generation was observed from 2019 to 2023, with FCFF rising from 357 million US$ to a peak of 2,100 million US$. However, this trend reversed in 2024, as FCFF declined significantly to 1,307 million US$, marking a substantial reduction in the firm's cash-generating capacity for that period.
- EV/FCFF Ratio Interpretation
- The EV/FCFF ratio reached an exceptional high of 98.38 in 2019, suggesting a valuation that was highly aggressive relative to the cash flows produced. This ratio compressed rapidly to 23.38 by 2020. While the ratio fluctuated in subsequent years, it reached its lowest point in 2023 at 20.48, coinciding with the peak in FCFF. In 2024, the ratio increased to 36.00, driven by the dual impact of a rising enterprise value and a contracting free cash flow.
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