Enterprise Value to FCFF (EV/FCFF)
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- Income Statement
- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Net Profit Margin since 2005
- Current Ratio since 2005
- Total Asset Turnover since 2005
- Analysis of Debt
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Free Cash Flow to The Firm (FCFF)
Netflix Inc., FCFF calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-12-31), 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).
- Net cash provided by operating activities
- There was a significant decline from 2,427,077 thousand USD at the end of 2020 to 392,610 thousand USD by the end of 2021. This was followed by a strong recovery to 2,026,257 thousand USD in 2022, and then a notable increase to over 7 million thousand USD in both 2023 and 2024. The cash flows stabilized at a high level in 2023 and 2024, indicating improved operational cash generation capacity in the most recent years.
- Free cash flow to the firm (FCFF)
- The free cash flow to the firm mirrored the trend of operating cash flows. It decreased sharply from 2,585,251 thousand USD in 2020 to 539,845 thousand USD in 2021, followed by a recovery to 2,214,967 thousand USD in 2022. Subsequently, it rose significantly to over 7.5 million thousand USD in 2023 and slightly declined but remained stable around this level in 2024. This pattern suggests that after a dip in 2021, the company's ability to generate cash flow available to all capital providers strengthened markedly and consistently in the last two years.
Interest Paid, Net of Tax
Netflix Inc., interest paid, net of tax calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-12-31), 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).
2 2024 Calculation
Interest paid, tax = Interest paid × EITR
= × =
- Effective Income Tax Rate (EITR)
- The effective income tax rate exhibited moderate fluctuations over the analyzed period. It started at 14% in 2020, then declined to 12% in 2021, indicating a decrease in tax expense relative to pre-tax income. This was followed by an increase to 15% in 2022, suggesting a temporary rise in tax liability or changes in tax regulations or income mix. In the subsequent years, 2023 and 2024, the rate stabilized at 13%, reflecting a relatively consistent tax burden in those years.
- Interest Paid, Net of Tax
- The interest expense net of tax showed a declining trend throughout the period. Beginning at approximately 656 million US dollars in 2020, it increased slightly to about 672 million in 2021, but then steadily decreased over the following years to roughly 596 million in 2022, about 596 million in 2023, and further down to approximately 587 million in 2024. This pattern suggests effective management of interest-bearing liabilities, perhaps through refinancing, repayment of debt, or favorable interest rates, leading to a gradual reduction in net interest payments.
Enterprise Value to FCFF Ratio, Current
Netflix Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Alphabet Inc. | |
| Comcast Corp. | |
| Meta Platforms Inc. | |
| Trade Desk Inc. | |
| Walt Disney Co. | |
| EV/FCFF, Sector | |
| Media & Entertainment | |
| EV/FCFF, Industry | |
| Communication Services | |
Based on: 10-K (reporting date: 2024-12-31).
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
Netflix Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
| EV/FCFF, Sector | ||||||
| Media & Entertainment | ||||||
| EV/FCFF, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
The analysis of the financial data reveals significant fluctuations in the enterprise value (EV) and free cash flow to the firm (FCFF) over the observed periods. These oscillations provide insight into valuation trends and cash generation efficiency.
- Enterprise Value (EV)
- The EV shows a notable decrease from approximately 246.6 billion US dollars at the end of 2020 to around 170.8 billion by the end of 2022. Subsequently, it rises sharply, reaching about 421.7 billion US dollars by the end of 2024. This pattern indicates a substantial decrease in market valuation or perceived risk between 2020 and 2022, followed by a strong recovery or revaluation over the next two years.
- Free Cash Flow to the Firm (FCFF)
- The FCFF experienced a marked decline from approximately 2.6 billion US dollars in 2020 to around 540 million in 2021. Thereafter, it improves significantly, reaching approximately 7.5 billion US dollars by 2023 and maintaining this elevated level in 2024. This trend suggests initial pressure on cash flow generation, which appears to have been alleviated in the latest periods, reflecting operational improvements or enhanced capital management.
- EV/FCFF Ratio
- The EV/FCFF ratio exhibits extreme volatility, starting at a high level of about 95.4 in 2020, peaking dramatically to 335.4 in 2021 due to the sharp drop in FCFF relative to EV, then decreasing sharply to 33.8 in 2023. By the end of 2024, the ratio increases again to 56.2. These fluctuations point to considerable changes in valuation multiples and possibly market perceptions about growth prospects, risk, or capital structure.
Overall, the data indicate periods of financial strain and recovery, with cash flow generation showing a substantial rebound after 2021, and enterprise valuation responding in kind but with greater variability. The EV/FCFF ratio's volatility underscores the dynamic risk and return expectations reflected in the market valuation relative to cash flow.