.Enterprise Value to FCFF (EV/FCFF)
Difficulty: Intermediate
Free Cash Flow to The Firm (FCFF)
Facebook Inc., FCFF calculation
USD $ in millions
| 12 months ended | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|---|
| | Net income | |||||
| | Net noncash charges | |||||
| | Changes in assets and liabilities | |||||
| | Net cash provided by operating activities | |||||
| | Cash paid during the period for interest, net of tax1 | |||||
| | Purchases of property and equipment | |||||
| | Property and equipment acquired under capital leases | |||||
| | Free cash flow to the firm (FCFF) |
| Item | Description | The company |
|---|---|---|
| FCFF | Free cash flow to the firm is the cash flow available to the Facebook Inc.'s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. | Facebook Inc.'s FCFF increased from 2015 to 2016 and from 2016 to 2017. |
Interest Paid, Net of Tax
Facebook Inc., interest paid, net of tax calculation
USD $ in millions
| 12 months ended | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|---|
| Effective Income Tax Rate (EITR) | ||||||
| | EITR1 | % | % | % | % | % |
| Interest Paid, Net of Tax | ||||||
| | Cash paid during the period for interest, before tax | |||||
| | Less: Cash paid during the period for interest, tax2 | |||||
| | Cash paid during the period for interest, net of tax | |||||
2017 Calculations
2 Cash paid during the period for interest, tax = Cash paid during the period for interest × EITR
= × % =
Enterprise Value to FCFF Ratio, Current
Facebook Inc., 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 | |
| Adobe Systems Inc. | |
| Alphabet Inc. | |
| International Business Machines Corp. | |
| Microsoft Corp. | |
| Oracle Corp. | |
| salesforce.com inc. | |
| EV/FCFF, Sector | |
| Software & Computer Services | |
| EV/FCFF, Industry | |
| Technology | |
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
Facebook Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| 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 | ||||||
| Adobe Systems Inc. | ||||||
| Alphabet Inc. | ||||||
| International Business Machines Corp. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| salesforce.com inc. | ||||||
| EV/FCFF, Sector | ||||||
| Software & Computer Services | ||||||
| EV/FCFF, Industry | ||||||
| Technology | ||||||
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. | Facebook Inc.'s EV/FCFF ratio declined from 2015 to 2016 and from 2016 to 2017. |
