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Kraft Heinz Co. (KHC)

Enterprise Value to FCFF (EV/FCFF)

Difficulty: Intermediate

Kraft Heinz Co., FCFF calculation

USD $ in millions

	12 months ended	Dec 29, 2018	Dec 30, 2017	Dec 31, 2016	Dec 31, 2015
	Net income (loss) attributable to Kraft Heinz
	Net (income) loss attributable to noncontrolling interest
	Net noncash charges
	Changes in current assets and liabilities
	Net cash provided by operating activities
	Cash paid during the period for interest, net of tax¹
	Capital expenditures
	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 Kraft Heinz Co.’s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Kraft Heinz Co.’s FCFF declined from 2016 to 2017 but then increased from 2017 to 2018 not reaching 2016 level.

Kraft Heinz Co., interest paid, net of tax calculation

USD $ in millions

	12 months ended	Dec 29, 2018	Dec 30, 2017	Dec 31, 2016	Dec 31, 2015
	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

2018 Calculations

² Cash paid during the period for interest, tax = Cash paid during the period for interest × EITR
= hidden × hidden = hidden

Kraft Heinz Co., 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
General Mills Inc.
Mondelēz International Inc.
EV/FCFF, Sector
Food Producers
EV/FCFF, Industry
Consumer Goods

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.

Kraft Heinz Co., historical EV/FCFF calculation, comparison to benchmarks

		Dec 29, 2018	Dec 30, 2017	Dec 31, 2016	Dec 31, 2015
	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
	General Mills Inc.
	Mondelēz International Inc.
	EV/FCFF, Sector
	Food Producers
	EV/FCFF, Industry
	Consumer Goods

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.	Kraft Heinz Co.’s EV/FCFF ratio increased from 2016 to 2017 but then declined significantly from 2017 to 2018.

	Kraft Heinz Co.	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