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Intuitive Surgical Inc. (ISRG)

Enterprise Value to FCFF (EV/FCFF)

Difficulty: Intermediate

Intuitive Surgical Inc., FCFF calculation

USD $ in thousands

	12 months ended	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Net income attributable to Intuitive Surgical, Inc.
	Net loss attributable to noncontrolling interest in joint venture
	Net noncash charges
	Changes in operating assets and liabilities, net of effects of acquisition
	Net cash provided by operating activities
	Interest paid, net of tax¹
	Purchase of property, plant and equipment, and intellectual property
	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 Intuitive Surgical Inc.’s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Intuitive Surgical Inc.’s FCFF declined from 2016 to 2017 but then increased from 2017 to 2018 not reaching 2016 level.

Intuitive Surgical Inc., interest paid, net of tax calculation

USD $ in thousands

	12 months ended	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Effective Income Tax Rate (EITR)
	EITR¹
	Interest Paid, Net of Tax
	Interest paid, before tax
	Less: Interest paid, tax²
	Interest paid, net of tax

2018 Calculations

² Interest paid, tax = Interest paid × EITR
= hidden × hidden = hidden

Intuitive Surgical Inc., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (USD $ in thousands)
Enterprise value (EV)
Free cash flow to the firm (FCFF)
Ratio
EV/FCFF
Benchmarks
EV/FCFF, Competitors
Becton, Dickinson & Co.
Medtronic PLC
Stryker Corp.
Thermo Fisher Scientific Inc.
UnitedHealth Group Inc.
EV/FCFF, Sector
Health Care Equipment & Services
EV/FCFF, Industry
Health Care

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.

Intuitive Surgical Inc., historical EV/FCFF calculation, comparison to benchmarks

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Selected Financial Data (USD $ in thousands)
	Enterprise value (EV)¹
	Free cash flow to the firm (FCFF)²
	Ratio
	EV/FCFF³
	Benchmarks
	EV/FCFF, Competitors
	Becton, Dickinson & Co.
	Medtronic PLC
	Stryker Corp.
	Thermo Fisher Scientific Inc.
	UnitedHealth Group Inc.
	EV/FCFF, Sector
	Health Care Equipment & Services
	EV/FCFF, Industry
	Health Care

2018 Calculations

³ EV/FCFF = EV ÷ FCFF
= hidden ÷ hidden = hidden

Ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	Intuitive Surgical Inc.’s EV/FCFF ratio increased from 2016 to 2017 and from 2017 to 2018.

	Intuitive Surgical Inc.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

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Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality