Enterprise Value to FCFF (EV/FCFF)
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- Income Statement
- Statement of Comprehensive Income
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Reportable Segments
- Analysis of Geographic Areas
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Operating Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Return on Assets (ROA) 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: 2025-12-31), 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).
1, 2 See details »
The financial performance, as indicated by cash flows, exhibits notable fluctuations over the five-year period. Cash flows from operating activities demonstrate an initial decline followed by a recovery, while free cash flow to the firm (FCFF) shows a more pronounced and volatile pattern.
- Cash Flows from Operating Activities
- Cash flows from operating activities decreased slightly from $8,756 million in 2021 to $8,720 million in 2022. A more substantial decrease was observed in 2023, falling to $6,420 million. This was followed by a modest decline to $6,318 million in 2024. However, a recovery is evident in 2025, with cash flows increasing to $7,153 million.
- Free Cash Flow to the Firm (FCFF)
- FCFF experienced a decline from $6,459 million in 2021 to $6,101 million in 2022. A significant reduction occurred in 2023, with FCFF plummeting to $1,640 million. A slight improvement was noted in 2024, reaching $1,932 million. FCFF continued to improve in 2025, increasing to $3,088 million, though remaining below the levels observed in 2021 and 2022.
The disparity between the trends in operating cash flow and FCFF suggests that factors beyond core operations, such as capital expenditures or changes in working capital, are significantly impacting the firm’s available cash. The substantial decrease in FCFF in 2023, despite a relatively moderate decline in operating cash flow, warrants further investigation. The recovery in both metrics in 2024 and 2025 indicates a potential stabilization, but FCFF has not yet returned to its earlier levels.
- Relationship between Operating Cash Flow and FCFF
- The difference between operating cash flow and FCFF widens considerably in 2023 and 2024, indicating increased cash outflows related to items deducted from operating cash flow to arrive at FCFF. This could include increased capital expenditures, debt repayments, or other uses of cash not directly related to core business operations. The narrowing of this difference in 2025 suggests a moderation of these outflows.
Interest Paid, Net of Tax
Texas Instruments Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
2 2025 Calculation
Cash payments for interest on long-term debt, tax = Cash payments for interest on long-term debt × EITR
= × =
3 2025 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= × =
The analysis reveals a notable increase in cash payments for interest on long-term debt, net of tax, over the five-year period. Simultaneously, capitalized interest, net of tax, also demonstrates an increasing, though less consistent, trend. The effective income tax rate exhibits relative stability with minor fluctuations.
- Cash Payments for Interest on Long-Term Debt, Net of Tax
- Cash payments for interest on long-term debt, net of tax, increased significantly from US$158 million in 2021 to US$475 million in 2025. This represents a cumulative increase of over 200%. The most substantial year-over-year increase occurred between 2022 and 2023, rising from US$173 million to US$282 million. Growth continued, albeit at a decreasing rate, reaching US$416 million in 2024 before concluding at US$475 million in 2025.
- Capitalized Interest, Net of Tax
- Capitalized interest, net of tax, generally trended upward, moving from US$7 million in 2021 to US$11 million in 2025. However, this increase was not linear. A decrease was observed from 2022 (US$5 million) to 2021 (US$7 million), followed by an increase to US$10 million in 2023, peaking at US$18 million in 2024 before declining to US$11 million in 2025. This suggests potential fluctuations in qualifying asset construction activity.
- Effective Income Tax Rate
- The effective income tax rate remained relatively stable throughout the period, fluctuating between 12.00% and 12.90%. It began at 12.90% in 2021, decreased to 12.00% in 2024, and then increased slightly to 12.40% in 2025. These minor variations suggest no significant changes in the company’s tax profile during the analyzed timeframe.
The combined effect of increasing interest payments and relatively stable tax rates indicates a growing proportion of earnings allocated to interest expense. The increase in capitalized interest suggests ongoing investment in projects qualifying for interest capitalization, but the fluctuations warrant further investigation to understand the underlying drivers of these changes.
Enterprise Value to FCFF Ratio, Current
Texas Instruments Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ 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: 2025-12-31).
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, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| 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: 2025-12-31), 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).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
The Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio exhibits significant fluctuations over the observed period. Initial values indicate a relatively stable, though increasing, ratio, followed by a substantial increase and subsequent decline.
- Enterprise Value (EV)
- Enterprise Value increased from US$156,316 million in 2021 to US$164,860 million in 2022, representing a growth of approximately 5.4%. A decrease to US$147,407 million was noted in 2023, before recovering to US$172,634 million in 2024 and further increasing to US$210,135 million in 2025. This suggests periods of both expansion and contraction in the company’s total value.
- Free Cash Flow to the Firm (FCFF)
- Free Cash Flow to the Firm decreased from US$6,459 million in 2021 to US$6,101 million in 2022, a decline of roughly 5.8%. A dramatic reduction occurred in 2023, with FCFF falling to US$1,640 million. A modest recovery to US$1,932 million was observed in 2024, followed by a more substantial increase to US$3,088 million in 2025. This indicates considerable volatility in the cash flow generated by the firm.
- EV/FCFF Ratio
- The EV/FCFF ratio was 24.20 in 2021 and increased to 27.02 in 2022, indicating a slightly higher valuation relative to free cash flow. A substantial increase was observed in 2023, with the ratio reaching 89.85, driven primarily by the significant decrease in FCFF. The ratio remained elevated at 89.36 in 2024. A notable decrease to 68.04 was recorded in 2025, coinciding with the increase in FCFF. The fluctuations suggest a changing market perception of the firm’s value relative to its cash-generating ability, or significant changes in the firm’s cash flow.
The considerable increase in the EV/FCFF ratio in 2023 warrants further investigation, as it suggests a substantial premium placed on the enterprise value relative to the free cash flow generated during that year. The subsequent decline in 2025, while still elevated compared to earlier periods, indicates a partial correction of this valuation.