Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Monster Beverage Corp., FCFF calculation
US$ in thousands
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The financial trajectory between 2019 and 2023 is characterized by moderate volatility, featuring a notable dip in 2022 followed by a significant recovery in 2023. Both operating cash flows and free cash flow to the firm exhibit a strong positive correlation, moving in tandem across the five-year period.
- Net Cash Provided by Operating Activities
- Operating cash flows increased from 1.11 billion US$ in 2019 to a peak of 1.36 billion US$ in 2020. A two-year decline followed, with the metric reaching a period low of 887.7 million US$ in 2022. This downward trend was decisively reversed in 2023, with operating cash flows surging to 1.72 billion US$, the highest level within the analyzed timeframe.
- Free Cash Flow to the Firm (FCFF)
- FCFF mirrored the operating cash flow pattern, rising to 1.30 billion US$ in 2020 before contracting significantly to 677.2 million US$ by 2022. The 2023 fiscal year marked a substantial rebound, with FCFF increasing to 1.49 billion US$. This represents a growth of approximately 119% relative to the 2022 trough, signaling a strong restoration of cash generation capacity.
- Capital Expenditure and Cash Conversion
- The difference between net operating cash and FCFF indicates a shift in capital allocation. In 2019 and 2021, the gap remained relatively narrow. However, 2022 saw a widening of this gap during a period of reduced operating cash, which exacerbated the decline in FCFF. In 2023, although the absolute difference between operating cash and FCFF increased further, the substantial growth in operating cash provided sufficient coverage to deliver robust free cash flow.
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Interest Paid, Net of Tax
Monster Beverage Corp., interest paid, net of tax calculation
US$ in thousands
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
2 2023 Calculation
Cash paid during the year for interest, tax = Cash paid during the year for interest × EITR
= 363 × 21.15% = 77
The financial data reveals a period of volatility in after-tax interest expenditures between 2019 and 2023. Cash outflows for interest, net of tax, experienced a significant contraction in 2020 before trending upward to a peak in 2022.
- Interest Expenditure Trends
- Cash paid for interest, net of tax, declined from $250,000 in 2019 to a period low of $38,000 in 2020. This was followed by a multi-year increase, reaching $327,000 in 2022, which represents the highest value in the analyzed timeframe. A slight reduction was observed in 2023, with payments decreasing to $286,000.
- Effective Income Tax Rate (EITR) Fluctuations
- The effective income tax rate remained generally consistent within a range of 21% to 24%, with a notable anomaly in 2020 when the rate dropped to 13.32%. The rate subsequently recovered to 23.53% in 2021 and peaked at 24.20% in 2022, before settling at 21.15% in 2023.
- Correlation Analysis
- The sharp reduction in net interest payments in 2020 coincided with the lowest recorded effective tax rate of the period. However, the subsequent rise in interest payments through 2022 occurred alongside a normalizing and increasing tax rate, indicating that shifts in underlying debt obligations or interest costs were the primary drivers of the net cash outflow trends rather than tax shielding alone.
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Enterprise Value to FCFF Ratio, Current
Monster Beverage Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 53,704,468) |
| Free cash flow to the firm (FCFF) | 1,485,835) |
| Valuation Ratio | |
| EV/FCFF | 36.14 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Coca-Cola Co. | 62.18 |
| Mondelēz International Inc. | 28.77 |
| PepsiCo Inc. | 22.09 |
| Philip Morris International Inc. | 30.02 |
| EV/FCFF, Sector | |
| Food, Beverage & Tobacco | 32.73 |
| EV/FCFF, Industry | |
| Consumer Staples | 43.76 |
Based on: 10-K (reporting date: 2023-12-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Monster Beverage Corp., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | 58,254,789) | 49,154,351) | 41,602,700) | 44,182,735) | 32,183,522) | |
| Free cash flow to the firm (FCFF)2 | 1,485,835) | 677,186) | 1,099,718) | 1,297,922) | 1,004,853) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 39.21 | 72.59 | 37.83 | 34.04 | 32.03 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Coca-Cola Co. | 26.54 | 27.95 | 25.28 | — | — | |
| Mondelēz International Inc. | 31.39 | 34.05 | 31.98 | — | — | |
| PepsiCo Inc. | 28.63 | 40.39 | 33.08 | — | — | |
| Philip Morris International Inc. | 20.71 | 19.53 | 16.35 | — | — | |
| EV/FCFF, Sector | ||||||
| Food, Beverage & Tobacco | 26.10 | 28.47 | 24.71 | — | — | |
| EV/FCFF, Industry | ||||||
| Consumer Staples | 30.22 | 30.06 | 20.91 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
3 2023 Calculation
EV/FCFF = EV ÷ FCFF
= 58,254,789 ÷ 1,485,835 = 39.21
4 Click competitor name to see calculations.
The Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio demonstrates significant volatility between 2019 and 2023, characterized by a period of gradual increase, a severe spike in 2022, and a subsequent normalization in 2023. This trend is the result of a steady expansion in Enterprise Value contrasted against fluctuating cash flow generation.
- Enterprise Value Growth
- A consistent upward trajectory is observed in the Enterprise Value, which grew from $32.18 billion in 2019 to $58.25 billion by 2023. Aside from a slight contraction in 2021, the overall trend indicates a substantial increase in the market valuation of the firm's core operations over the five-year period.
- Free Cash Flow to the Firm Volatility
- FCFF exhibited instability, moving from $1.00 billion in 2019 to a peak of $1.49 billion in 2023. A significant contraction occurred in 2022, where FCFF dropped to $677.19 million, marking the lowest point in the analyzed period and serving as the primary driver for the valuation anomaly in that year.
- EV/FCFF Ratio Analysis
- The valuation multiple remained relatively stable between 32.03 and 37.83 from 2019 to 2021. In 2022, the ratio surged to 72.59, reflecting a misalignment where the Enterprise Value continued to rise while cash flow generation diminished. This spike corrected sharply in 2023 to 39.21, as the recovery of FCFF to $1.49 billion offset the continued growth in Enterprise Value, returning the multiple to levels consistent with the 2019-2021 baseline.
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