.Enterprise Value to FCFF (EV/FCFF)
Difficulty: Intermediate
Free Cash Flow to The Firm (FCFF)
Costco Wholesale Corp., FCFF calculation
USD $ in millions
| 12 months ended | Sep 3, 2017 | Aug 28, 2016 | Aug 30, 2015 | Aug 31, 2014 | Sep 1, 2013 | Sep 2, 2012 | |
|---|---|---|---|---|---|---|---|
| | Net income attributable to Costco | ||||||
| | Net income attributable to noncontrolling interests | ||||||
| | Net noncash charges | ||||||
| | Changes in operating assets and liabilities | ||||||
| | Net cash provided by operating activities | ||||||
| | Cash paid during the year for interest, reduced by interest capitalized, net of tax1 | ||||||
| | Interest capitalized, net of tax2 | ||||||
| | Additions to property and equipment | ||||||
| | Property acquired under build-to-suit and capital leases | ||||||
| | Free cash flow to the firm (FCFF) |
1, 2 See Details »
| Item | Description | The company |
|---|---|---|
| FCFF | Free cash flow to the firm is the cash flow available to the Costco Wholesale Corp.'s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. | Costco Wholesale Corp.'s FCFF declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level. |
Interest Paid, Net of Tax
Costco Wholesale Corp., interest paid, net of tax calculation
USD $ in millions
| 12 months ended | Sep 3, 2017 | Aug 28, 2016 | Aug 30, 2015 | Aug 31, 2014 | Sep 1, 2013 | Sep 2, 2012 | |
|---|---|---|---|---|---|---|---|
| Effective Income Tax Rate (EITR) | |||||||
| | EITR1 | % | % | % | % | % | % |
| Interest Paid, Net of Tax | |||||||
| | Cash paid during the year for interest, reduced by interest capitalized, before tax | ||||||
| | Less: Cash paid during the year for interest, reduced by interest capitalized, tax2 | ||||||
| | Cash paid during the year for interest, reduced by interest capitalized, net of tax | ||||||
| Interest Costs Capitalized, Net of Tax | |||||||
| | Interest capitalized, before tax | ||||||
| | Less: Interest capitalized, tax3 | ||||||
| | Interest capitalized, net of tax | ||||||
2017 Calculations
2 Cash paid during the year for interest, reduced by interest capitalized, tax = Cash paid during the year for interest, reduced by interest capitalized × EITR
= × % =
3 Interest capitalized, tax = Interest capitalized × EITR
= × % =
Enterprise Value to FCFF Ratio, Current
Costco Wholesale Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (USD $ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors | |
| Amazon.com Inc. | |
| eBay Inc. | |
| Home Depot Inc. | |
| Lowe's Cos. Inc. | |
| Netflix Inc. | |
| Target Corp. | |
| TJX Cos. Inc. | |
| Walmart Inc. | |
| EV/FCFF, Sector | |
| General Retailers | |
| EV/FCFF, Industry | |
| Consumer Services | |
If company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if 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
| Sep 3, 2017 | Aug 28, 2016 | Aug 30, 2015 | Aug 31, 2014 | Sep 1, 2013 | Sep 2, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| | Enterprise value (EV)1 | ||||||
| | Free cash flow to the firm (FCFF)2 | ||||||
| Ratio | |||||||
| | EV/FCFF3 | ||||||
| Benchmarks | |||||||
| EV/FCFF, Competitors | |||||||
| Amazon.com Inc. | |||||||
| eBay Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe's Cos. Inc. | |||||||
| Netflix Inc. | |||||||
| Target Corp. | |||||||
| TJX Cos. Inc. | |||||||
| Walmart Inc. | |||||||
| EV/FCFF, Sector | |||||||
| General Retailers | |||||||
| EV/FCFF, Industry | |||||||
| Consumer Services | |||||||
2017 Calculations
3 EV/FCFF = EV ÷ FCFF
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| EV/FCFF | Enterprise value to free cash flow to the firm is whole company valuation indicator. | Costco Wholesale Corp.'s EV/FCFF ratio increased from 2015 to 2016 but then declined significantly from 2016 to 2017. |
