Enterprise Value to FCFF (EV/FCFF)
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Charter Communications Inc. pages available for free this week:
- Income Statement
- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2010
- Total Asset Turnover since 2010
- Analysis of Debt
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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: 2024-12-31), 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).
- Net Cash Flows from Operating Activities
- The net cash flows from operating activities show a general upward trend from 2020 to 2021, increasing from 14,562 million USD to 16,239 million USD. However, this trend reverses in subsequent years, with the figure declining to 14,925 million USD in 2022 and further decreasing to approximately 14,433 million USD in 2023 and stabilizing around 14,430 million USD in 2024. This indicates a peak in operating cash flows in 2021 followed by a gradual reduction and leveling off in the following years.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm exhibits a more pronounced decline over the observed period. Starting at 9,986 million USD in 2020, it rises to 11,971 million USD in 2021 but then experiences a significant drop to 9,083 million USD in 2022. The downward trend continues, reaching 7,171 million USD in 2023, with a slight increase to 7,323 million USD in 2024. This pattern suggests increasing constraints on the firm's available free cash, possibly due to higher capital expenditures or changes in working capital needs, despite relatively stable operating cash flows in recent years.
- Comparative Insights
- While operating cash flows show signs of recovery and stabilization after 2021, the free cash flow to the firm declines notably, implying that cash outflows related to investments or other non-operating activities have increased or remained high. The slight uptick in FCFF in 2024 could signal initial signs of improved cash generation capacity or reduced capital expenditure requirements, yet it remains substantially lower compared to the peak in 2021.
Interest Paid, Net of Tax
Charter Communications Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 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).
2 2024 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= × =
- Effective Income Tax Rate (EITR)
- The effective income tax rate exhibited a consistent upward trend from 14.55% in 2020 to a peak of 23.24% in 2023. In 2024, there was a slight decline to 21.98%, indicating a minor decrease after several years of increase. Overall, the tax rate more than increased by approximately 7 percentage points over the five-year period, suggesting changes in tax policy, profitability mix, or other tax-related factors affecting the company.
- Cash Paid for Interest, Net of Tax
- The cash paid for interest net of tax showed a steady and continuous increase throughout the period. Starting at $3,303 million in 2020, the amount rose every year, reaching $4,162 million in 2024. This represents an overall increase of about 26% over five years. The upward movement suggests growing interest expenses, possibly due to increased debt levels or higher interest rates impacting the company's financing costs.
Enterprise Value to FCFF Ratio, Current
Charter Communications Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ 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. | |
| Walt Disney Co. | |
| EV/FCFF, Sector | |
| Media & Entertainment | |
| EV/FCFF, Industry | |
| Communication Services | |
Based on: 10-K (reporting date: 2024-12-31).
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, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| 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. | ||||||
| Walt Disney Co. | ||||||
| EV/FCFF, Sector | ||||||
| Media & Entertainment | ||||||
| EV/FCFF, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
The financial data reveals several noteworthy trends over the five-year period from December 31, 2020, to December 31, 2024. The enterprise value exhibited a declining trajectory from 205,933 million US dollars in 2020 to 148,465 million US dollars in 2024. This represents a considerable reduction in market valuation, with the most significant decreases occurring between 2020 and 2023, followed by a slight stabilization in 2024.
In contrast, the free cash flow to the firm (FCFF) showed fluctuations over the same period. Initially, FCFF increased from 9,986 million US dollars in 2020 to a peak of 11,971 million US dollars in 2021, indicating improved cash-generating capacity relative to the firm’s operations. However, this was followed by a decline in subsequent years to 7,171 million US dollars in 2023. A modest recovery occurred in 2024, with FCFF rising slightly to 7,323 million US dollars.
The EV to FCFF ratio, which provides insight into valuation relative to free cash flow generation, decreased from 20.62 in 2020 to 16.46 in 2021, suggesting a more attractive valuation based on cash flows at that time. This improved valuation ratio was short-lived, as it rose again to 17.68 in 2022 and further to over 20 in both 2023 and 2024. The increase implies that although the enterprise value declined, the free cash flow eroded more sharply in those years, leading to a higher ratio and potentially signaling increased valuation pressure or reduced operational efficiency in generating cash flow.
- Enterprise Value (EV)
- Steady decline from 205,933 million to 148,465 million US dollars between 2020 and 2024, indicating decreasing firm valuation.
- Free Cash Flow to the Firm (FCFF)
- Initial growth in 2021 followed by a marked decline towards 2023, with a slight recovery in 2024, reflecting variability in operational cash generation.
- EV/FCFF Ratio
- Decreased initially in 2021, indicating improved valuation, then increased above 20 in 2023 and 2024, suggesting deteriorated valuation relative to free cash flow.