Enterprise Value to FCFF (EV/FCFF)
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- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Reportable Segments
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Assets (ROA) since 2005
- Total Asset Turnover since 2005
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Free Cash Flow to The Firm (FCFF)
Texas Instruments Inc., FCFF calculation
US$ in millions
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).
1, 2 See details »
The cash flows from operating activities for the company exhibited a rising trend from 2020 through 2022, increasing from $6,139 million to a peak of $8,756 million in 2021 and slightly declining to $8,720 million in 2022. However, this positive momentum reversed sharply in the subsequent years, with notable decreases to $6,420 million in 2023 and $6,318 million in 2024. This indicates a reduction in cash generated from the core business operations in recent years.
Free cash flow to the firm (FCFF) followed a somewhat different trajectory. Initially, it increased from $5,659 million in 2020 to $6,459 million in 2021. The figure then dipped slightly to $6,101 million in 2022, followed by a more pronounced decline to $1,640 million in 2023. In 2024, FCFF showed a modest recovery to $1,932 million, but still remained significantly lower than the levels observed in the earlier part of the period.
- Summary of trends:
- - Operating cash flows grew robustly till 2022, then fell sharply in the last two years.
- - Free cash flow showed initial growth but deteriorated substantially from 2022 onwards, implying higher investments, working capital changes, or other uses of cash.
- - The divergence between operating cash flows and FCFF in the later years suggests increased capital expenditures or financial obligations affecting free cash flow despite relatively stable operating cash inflows in 2023 and 2024 compared to the earlier decline.
Overall, these trends highlight a considerable shift in the company’s cash flow dynamics during this five-year period, with a strong operating cash generation phase followed by a contraction phase impacting the free cash available to the firm. This pattern may warrant further investigation to understand the underlying drivers such as operational challenges, increased capital spending, or changes in working capital management.
Interest Paid, Net of Tax
Texas Instruments Inc., interest paid, net of tax calculation
US$ in millions
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
Cash payments for interest on long-term debt, tax = Cash payments for interest on long-term debt × EITR
= × =
3 2024 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= × =
- Effective Income Tax Rate (EITR)
- The effective income tax rate has shown a gradual upward trend from 7% in 2020 to a peak of 12.9% in 2021. Following this peak, the rate slightly declined in subsequent years, reaching 12% by the end of 2024. This pattern indicates an initial increase in tax burden followed by a period of stabilization at a higher level than the initial rate in 2020.
- Cash Payments for Interest on Long-Term Debt, Net of Tax
- Cash payments for interest on long-term debt, net of tax, have experienced a notable increase over the five-year period. Starting at $169 million in 2020, payments decreased marginally to $158 million in 2021, then increased steadily, reaching $416 million by 2024. This upward trend suggests growing interest expenses associated with long-term debt, which may imply either an increase in debt levels or rising interest rates over the period.
- Capitalized Interest, Net of Tax
- Capitalized interest, net of tax, which was not reported in 2020, began at $7 million in 2021 and then exhibited some fluctuations but an overall rising pattern, reaching $18 million in 2024. This indicates an increasing portion of interest costs being added to the capital asset base, possibly reflecting ongoing investment activities financed through borrowing.
Enterprise Value to FCFF Ratio, Current
Texas Instruments Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Advanced Micro Devices Inc. | |
| Analog Devices Inc. | |
| Applied Materials Inc. | |
| Broadcom Inc. | |
| Intel Corp. | |
| KLA Corp. | |
| Lam Research Corp. | |
| Micron Technology Inc. | |
| NVIDIA Corp. | |
| Qualcomm Inc. | |
| EV/FCFF, Sector | |
| Semiconductors & Semiconductor Equipment | |
| EV/FCFF, Industry | |
| Information Technology | |
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
Texas Instruments 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 millions) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| EV/FCFF, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| EV/FCFF, Industry | ||||||
| Information Technology | ||||||
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.
- Enterprise Value (EV)
- The enterprise value exhibited fluctuations throughout the observed periods. It initially remained relatively stable between 2020 and 2021, with a marginal decrease from 156,606 million USD to 156,316 million USD. In 2022, it increased to 164,860 million USD, followed by a notable decline to 147,407 million USD in 2023. However, in 2024, the enterprise value rebounded significantly to 172,634 million USD, marking the highest value in the time series.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm showed variability and a general declining trend in the later years. After increasing from 5,659 million USD in 2020 to 6,459 million USD in 2021, it slightly decreased to 6,101 million USD in 2022. Subsequently, there was a sharp reduction to 1,640 million USD in 2023, with a minor increase to 1,932 million USD in 2024. Overall, this reflects a significant contraction in cash generation capability in the last two years.
- EV/FCFF Ratio
- The EV to FCFF ratio indicates valuation changes relative to cash flow generation. A downward trend occurred from 27.67 in 2020 to 24.2 in 2021, suggesting improved valuation metrics relative to cash flow. This was followed by an increase to 27.02 in 2022. Despite moderate ratios earlier, there was a dramatic surge in the ratio in 2023 and 2024, reaching 89.85 and 89.36 respectively. This sharp increase is primarily due to the steep decline in free cash flow, while enterprise value did not decrease proportionally, implying a potentially stretched valuation or weaker cash flow support during these years.