Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Costco Wholesale Corp., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2025-08-31), 10-K (reporting date: 2024-09-01), 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30).
- Net Cash Provided by Operating Activities
- The net cash provided by operating activities shows an overall increasing trend from 2020 through 2025. Beginning at 8,861 million US dollars in 2020, the figure slightly increased to 8,958 million in 2021, but then experienced a noticeable decline to 7,392 million in 2022. Following this dip, the metric rebounded significantly over the subsequent years, reaching 11,068 million in 2023 and continuing upward to 13,335 million by 2025.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm reveals a fluctuating pattern with an initial decline before recovering. Starting at 6,145 million US dollars in 2020, it decreased steadily to 5,483 million in 2021 and further down to 3,610 million in 2022. However, from 2023 onward, there was a marked improvement, with FCFF increasing to 6,838 million, slightly dropping to 6,727 million in 2024, and then rising again to 7,916 million in 2025.
- Summary and Insights
- The operating cash flow experienced a dip in 2022 but recovered robustly in later years, surpassing previous levels by 2025. Free cash flow to the firm, while showing more volatility and a sharper decline in the early years, also exhibited a recovery trend after 2022. This pattern may indicate increased operational efficiency or improved cash management in the later periods. The disparity between the trends of operating cash flow and free cash flow suggests possible variations in investment or capital expenditure patterns that could have influenced free cash flow totals in the observed timeframe.
Interest Paid, Net of Tax
Costco Wholesale Corp., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2025-08-31), 10-K (reporting date: 2024-09-01), 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30).
2 2025 Calculation
Cash paid during the year for interest, tax = Cash paid during the year for interest × EITR
= 106 × 25.10% = 27
- Effective Income Tax Rate (EITR)
- The effective income tax rate showed relative stability over the six-year period, fluctuating within a narrow range from 24% to approximately 26%. The rate began at 24.4% in 2020 and experienced minor variations year-to-year, peaking at 25.9% in 2023 before slightly declining again to 25.1% by 2025. This consistency suggests a stable tax environment or consistent tax management strategies during the period analyzed.
- Cash Paid During the Year for Interest, Net of Tax (in millions USD)
- The cash payments for interest, net of tax, exhibited moderate fluctuations throughout the years. Starting at $94 million in 2020, the amount increased to a peak of $113 million in 2021, indicating higher interest expenses or debt levels during that year. Following 2021, the interest payments declined gradually to $79 million by 2025. The downward trend in recent years could reflect reduced borrowing costs, lower debt levels, or refinancing at more favorable rates.
Enterprise Value to FCFF Ratio, Current
Costco Wholesale Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 403,271) |
| Free cash flow to the firm (FCFF) | 7,916) |
| Valuation Ratio | |
| EV/FCFF | 50.94 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Target Corp. | 11.37 |
| Walmart Inc. | 56.16 |
| EV/FCFF, Sector | |
| Consumer Staples Distribution & Retail | 46.65 |
| EV/FCFF, Industry | |
| Consumer Staples | 34.15 |
Based on: 10-K (reporting date: 2025-08-31).
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
Costco Wholesale Corp., historical EV/FCFF calculation, comparison to benchmarks
| Aug 31, 2025 | Sep 1, 2024 | Sep 3, 2023 | Aug 28, 2022 | Aug 29, 2021 | Aug 30, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Enterprise value (EV)1 | 397,403) | 399,049) | 243,035) | 209,733) | 195,411) | 155,588) | |
| Free cash flow to the firm (FCFF)2 | 7,916) | 6,727) | 6,838) | 3,610) | 5,483) | 6,145) | |
| Valuation Ratio | |||||||
| EV/FCFF3 | 50.20 | 59.32 | 35.54 | 58.09 | 35.64 | 25.32 | |
| Benchmarks | |||||||
| EV/FCFF, Competitors4 | |||||||
| Target Corp. | 12.95 | 21.20 | — | 20.94 | 11.33 | 14.93 | |
| Walmart Inc. | 47.89 | 30.87 | 30.99 | 33.26 | 14.86 | 22.39 | |
| EV/FCFF, Sector | |||||||
| Consumer Staples Distribution & Retail | — | 36.22 | 39.49 | 34.44 | 16.92 | 21.92 | |
| EV/FCFF, Industry | |||||||
| Consumer Staples | — | 31.09 | 30.21 | 30.04 | 20.90 | 23.26 | |
Based on: 10-K (reporting date: 2025-08-31), 10-K (reporting date: 2024-09-01), 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= 397,403 ÷ 7,916 = 50.20
4 Click competitor name to see calculations.
The enterprise value (EV) demonstrates a general upward trend over the observed periods, increasing from $155.6 billion in 2020 to a peak of approximately $399 billion in 2024 before slightly declining to $397.4 billion in 2025. This overall rise indicates a significant growth in the market valuation or invested capital of the company over the six-year span.
Free cash flow to the firm (FCFF) shows fluctuations throughout the years. It decreased from $6.1 billion in 2020 to a low of $3.6 billion in 2022, followed by a recovery reaching $7.9 billion in 2025. Despite the volatility in the middle years, the FCFF in 2025 suggests solid cash generation capabilities relative to the start of the period.
The EV to FCFF ratio exhibits notable variation, reflecting changes in valuation relative to the cash flow generated by the firm. Starting at 25.32 in 2020, the ratio peaked sharply at 58.09 in 2022, dropped to 35.54 in 2023, then rose again to 59.32 in 2024 before decreasing to 50.2 in 2025. These fluctuations suggest that market valuations expanded more rapidly than free cash flow in certain years, possibly indicating varying investor expectations or episodic impacts on cash flow.
- Summary of Key Trends
-
- Enterprise Value (EV)
- Consistently increased over the period, almost tripling from 2020 to 2024, then stabilizing in 2025.
- Free Cash Flow to the Firm (FCFF)
- Demonstrated a decline until 2022, followed by a robust recovery and growth through 2025.
- EV to FCFF Ratio
- Exhibited high volatility, with peaks in 2022 and 2024, reflecting fluctuations in valuation multiples versus cash flow performance.
Overall, the financial data suggests the company experienced substantial growth in enterprise value over the years, supported by an eventual rebound in free cash flow. However, the fluctuating EV/FCFF ratio highlights varying market perceptions of valuation relative to cash flow, warranting further investigation into underlying operational or market factors influencing these dynamics.