Enterprise Value to FCFF (EV/FCFF)
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Charter Communications Inc. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Return on Assets (ROA) since 2010
- Price to Earnings (P/E) since 2010
- Price to Sales (P/S) since 2010
- Analysis of Revenues
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Free Cash Flow to The Firm (FCFF)
Charter Communications Inc., FCFF calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2019-12-31).
The financial data indicates notable fluctuations in key cash flow metrics across the five-year period.
- Net cash flows from operating activities
-
There is a general upward trend in net cash flows from operating activities from 2019 through 2021, increasing from $11,748 million to a peak of $16,239 million. However, this positive momentum reverses in the subsequent years, with a decline to $14,925 million in 2022 and further down to $14,433 million in 2023. Despite the decrease in the last two years, the levels remain above those of 2019, indicating a stronger operating cash generation capacity relative to the beginning of the period.
- Free cash flow to the firm (FCFF)
-
Free cash flow to the firm exhibits a similar pattern initially, rising from $7,800 million in 2019 to a peak of $11,971 million by 2021. Following this peak, there is a pronounced decline in both 2022 and 2023, dropping to $9,083 million and $7,171 million, respectively. The decline in free cash flow in the last two years is more marked than the decrease observed in operating cash flows, which may suggest increasing capital expenditures, changes in working capital, or other cash outflows affecting free cash generation.
Overall, the data reflect an improvement in cash generation capabilities up to 2021, followed by a moderation or contraction in subsequent years. This shift may warrant further investigation into the company’s investment activities or changes in operational efficiency to fully understand the underlying drivers of the reduced free cash flow despite relatively steady operating cash flows.
Interest Paid, Net of Tax
Charter Communications Inc., interest paid, net of tax calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2019-12-31).
2 2023 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= × =
- Effective Income Tax Rate (EITR)
- The effective income tax rate shows a varying but overall increasing trend over the five-year period. Beginning at 18.06% in 2019, it decreased to a low of 14.55% in 2020, followed by a rise to 16.72% in 2021. The upward momentum continued, reaching 21.62% in 2022 and 23.24% in 2023. This pattern suggests a reduction in the tax rate initially, possibly due to favorable tax positions or policies in 2020, but with subsequent years reflecting higher tax burdens. The increase in 2022 and 2023 may indicate changes in tax legislation, shifts in profitability mix, or less favorable tax planning outcomes.
- Cash Paid for Interest, Net of Tax
- The cash outflow for net interest payments exhibited a steady upward trajectory throughout the period analyzed. Starting at $3,247 million in 2019, the figure rose incrementally each year: $3,303 million in 2020, $3,367 million in 2021, $3,534 million in 2022, and reaching $3,853 million in 2023. This consistent increase indicates growing interest expenses or changes in debt structure, such as increased borrowing or rising interest rates. The upward trend in cash interest paid implies a higher financing cost burden on the company over time.
Enterprise Value to FCFF Ratio, Current
Charter Communications Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Alphabet Inc. | |
| Comcast Corp. | |
| Meta Platforms Inc. | |
| Netflix Inc. | |
| Take-Two Interactive Software Inc. | |
| Walt Disney Co. | |
| EV/FCFF, Sector | |
| Media & Entertainment | |
| EV/FCFF, Industry | |
| Communication Services | |
Based on: 10-K (reporting date: 2023-12-31).
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
Charter Communications Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| 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 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| EV/FCFF, Sector | ||||||
| Media & Entertainment | ||||||
| EV/FCFF, Industry | ||||||
| Communication Services | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
3 2023 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise value (EV)
- Over the five-year period, there is a clear declining trend in enterprise value. Starting at approximately 191.6 billion USD at the end of 2019, the value increased in 2020 to about 205.9 billion USD, representing a peak within the period. Subsequently, it declined in 2021 to roughly 197.1 billion USD and continued decreasing more sharply through 2022 and 2023 to about 160.6 billion USD and 147.1 billion USD respectively. This indicates a gradual reduction in perceived overall company value after 2020.
- Free cash flow to the firm (FCFF)
- Free cash flow to the firm exhibited growth from 7.8 billion USD in 2019 to a peak of nearly 12.0 billion USD in 2021, showing increasing operational cash generation capability. However, from 2022 onwards, FCFF experienced a significant decline, falling to 9.1 billion USD and further decreasing to approximately 7.2 billion USD by the end of 2023. This downward movement in the last two years suggests challenges or increased investments limiting free cash flow.
- EV/FCFF Ratio
- The EV to FCFF ratio decreased markedly from a high of 24.57 in 2019 to its lowest point of 16.46 in 2021, reflecting a more favorable valuation relative to free cash flow in that year. However, after 2021, the ratio increased again, reaching 17.68 in 2022 and rising further to 20.51 in 2023. This upward trend signals that the company's valuation relative to its free cash flow became more expensive again after 2021, possibly due to the decline in free cash flow outpacing reductions in enterprise value.