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Enterprise Value to FCFF (EV/FCFF)
Difficulty: Intermediate
Free Cash Flow to The Firm (FCFF)
Microsoft Corp., FCFF calculation
USD $ in millions
Based on: 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31), 10-K (filing date: 2013-07-30).
| Item | Description | The company |
|---|---|---|
| FCFF | Free cash flow to the firm is the cash flow available to the Microsoft Corp.’s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. | Microsoft Corp.’s FCFF increased from 2016 to 2017 and from 2017 to 2018. |
Interest Paid, Net of Tax
Microsoft Corp., interest paid, net of tax calculation
USD $ in millions
Based on: 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31), 10-K (filing date: 2013-07-30).
2018 Calculations
2 Cash paid for interest on debt, tax = Cash paid for interest on debt × EITR
= × =
Enterprise Value to FCFF Ratio, Current
Microsoft 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 | |
| Adobe Systems Inc. | |
| Alphabet Inc. | |
| Facebook Inc. | |
| International Business Machines Corp. | |
| Oracle Corp. | |
| salesforce.com inc. | |
| EV/FCFF, Sector | |
| Software & Computer Services | |
| EV/FCFF, Industry | |
| Technology | |
Based on: 10-K (filing date: 2018-08-03).
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
Microsoft Corp., historical EV/FCFF calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-08-03), 10-K (filing date: 2017-08-02), 10-K (filing date: 2016-07-28), 10-K (filing date: 2015-07-31), 10-K (filing date: 2014-07-31), 10-K (filing date: 2013-07-30).
2018 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. | Microsoft Corp.’s EV/FCFF ratio increased from 2016 to 2017 and from 2017 to 2018. |
