Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
CSX Corp., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The financial performance from 2018 through 2022 is characterized by a general upward trajectory in cash generation, interrupted by a notable contraction in 2020. While both operating cash flows and free cash flow to the firm (FCFF) recovered strongly in the subsequent years, the divergence between these two metrics in the final period suggests a shift in capital allocation priorities.
- Net Cash Provided by Operating Activities
- Operating cash flow exhibited steady growth in the early period, rising from US$ 4,641 million in 2018 to US$ 4,850 million in 2019. A decline occurred in 2020, where cash provided by operations fell to US$ 4,263 million. However, a robust recovery followed, with figures ascending to US$ 5,099 million in 2021 and reaching a five-year peak of US$ 5,619 million by the end of 2022.
- Free Cash Flow to the Firm (FCFF) Trends
- FCFF followed a similar pattern to operating cash flow but displayed greater volatility. After increasing to US$ 4,001 million in 2019, FCFF experienced a significant drop to US$ 3,265 million in 2020, representing the lowest point in the analyzed period. A sharp rebound was observed in 2021, with FCFF peaking at US$ 4,386 million, before slightly receding to US$ 4,293 million in 2022.
- Operating Cash Flow to FCFF Variance
- The variance between net cash provided by operating activities and FCFF serves as an indicator of capital expenditures. Between 2018 and 2021, this gap remained relatively stable or narrowed, reaching its lowest point in 2021. In 2022, a significant divergence emerged; despite operating cash flow increasing by US$ 520 million, FCFF decreased by US$ 93 million. This indicates a substantial increase in capital investments or expenditures during the 2022 fiscal year.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Interest Paid, Net of Tax
CSX Corp., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
2 2022 Calculation
Interest paid, net of amounts capitalized, tax = Interest paid, net of amounts capitalized × EITR
= 729 × 23.10% = 168
The analysis of net interest payments and the effective income tax rate reveals a period of initial expansion followed by a phase of stabilization between 2018 and 2022.
- Net Interest Expenditure Trends
- A significant increase in interest paid, net of amounts capitalized and tax, was observed between 2018 and 2019, where the figure rose from 472 million USD to 554 million USD. Following this growth, the expenditure entered a plateau phase, reaching a peak of 572 million USD in 2020. A slight contraction occurred in 2021, with values dipping to 549 million USD, before recovering to 561 million USD by the end of 2022.
- Effective Income Tax Rate Stability
- The effective income tax rate demonstrated a high degree of consistency throughout the period. The rate fluctuated minimally within a narrow corridor, beginning at 23.10% in 2018 and returning to 23.10% in 2022. The variance remained limited to a range of 1.0 percentage point, with the peak rate of 23.80% occurring in 2020 and the trough of 22.80% in 2019.
- Financial Interpretation
- The stability of the effective income tax rate indicates that the variations in net interest payments were driven by changes in gross interest costs rather than fluctuations in tax benefits. The lack of volatility in the tax rate suggests that the net-of-tax interest expense serves as a reliable proxy for the company's underlying debt service trends during this five-year window.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Enterprise Value to FCFF Ratio, Current
CSX Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 78,608) |
| Free cash flow to the firm (FCFF) | 4,293) |
| Valuation Ratio | |
| EV/FCFF | 18.31 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| FedEx Corp. | 13.91 |
| Uber Technologies Inc. | 14.25 |
| Union Pacific Corp. | 30.00 |
| United Airlines Holdings Inc. | 12.71 |
| United Parcel Service Inc. | 17.32 |
| EV/FCFF, Sector | |
| Transportation | 24.82 |
| EV/FCFF, Industry | |
| Industrials | 36.58 |
Based on: 10-K (reporting date: 2022-12-31).
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
CSX Corp., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 81,293) | 91,202) | 80,813) | 75,818) | 69,207) | |
| Free cash flow to the firm (FCFF)2 | 4,293) | 4,386) | 3,265) | 4,001) | 3,687) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 18.94 | 20.80 | 24.76 | 18.95 | 18.77 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| FedEx Corp. | 19.13 | 18.72 | — | — | — | |
| Uber Technologies Inc. | 136.28 | — | — | — | — | |
| Union Pacific Corp. | 23.83 | 26.41 | — | — | — | |
| United Airlines Holdings Inc. | 11.88 | 79.24 | — | — | — | |
| United Parcel Service Inc. | 16.83 | 16.98 | — | — | — | |
| EV/FCFF, Sector | ||||||
| Transportation | 21.84 | 24.82 | — | — | — | |
| EV/FCFF, Industry | ||||||
| Industrials | 24.33 | 28.81 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
3 2022 Calculation
EV/FCFF = EV ÷ FCFF
= 81,293 ÷ 4,293 = 18.94
4 Click competitor name to see calculations.
Analysis of the Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio indicates a period of relative stability interrupted by a significant valuation spike in 2020, followed by a return to historical norms by the end of 2022.
- Enterprise Value Trends
- Enterprise Value exhibited a consistent upward trajectory from 2018, rising from 69,207 million to a peak of 91,202 million in 2021. A contraction occurred in 2022, with the value decreasing to 81,293 million.
- Free Cash Flow to the Firm (FCFF) Performance
- FCFF demonstrated volatility over the five-year period. Following an initial increase in 2019, a contraction to 3,265 million was observed in 2020. This was followed by a strong recovery in 2021, reaching a peak of 4,386 million, and remaining relatively stable at 4,293 million in 2022.
- EV/FCFF Ratio Interpretation
- The ratio remained stable near 18.8x between 2018 and 2019. In 2020, the ratio expanded sharply to 24.76x, driven by the divergence of rising enterprise value and declining cash flows. This expansion corrected throughout 2021 and 2022 as cash flow growth offset valuation peaks. By December 31, 2022, the ratio of 18.94x indicates a return to the valuation baseline observed at the start of the analyzed period.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?