Enterprise Value to FCFF (EV/FCFF)
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- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Common Stock Valuation Ratios
- Dividend Discount Model (DDM)
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Analysis of Debt
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Free Cash Flow to The Firm (FCFF)
Western Digital Corp., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-07-01), 10-K (reporting date: 2021-07-02), 10-K (reporting date: 2020-07-03), 10-K (reporting date: 2019-06-28), 10-K (reporting date: 2018-06-29).
- Operating Cash Flow
- There is a clear downward trend in net cash provided by operating activities over the examined periods. Starting at a high of 4205 million USD in June 2018, the figure dropped sharply to 1547 million USD in June 2019 and continued to decrease to 824 million USD by July 2020. A modest recovery is noted in July 2021 and July 2022, with values of 1898 million USD and 1880 million USD respectively; however, by June 2023, a significant deterioration is evident, resulting in a negative cash flow of 408 million USD. This shift from strong positive cash generation to negative cash flow in the latest period suggests operational challenges or increased outlays impacting liquidity.
- Free Cash Flow to the Firm (FCFF)
- Similar to operating cash flow, the free cash flow to the firm exhibits a declining trajectory across the timeline. The value was highest at 3623 million USD in June 2018, steadily decreasing to 1130 million USD in June 2019 and further down to 471 million USD in July 2020. Although there is a partial recovery observed in July 2021 and July 2022, with FCFF levels rising to 1147 million USD and 947 million USD respectively, a significant negative flow of 983 million USD is recorded in June 2023. This negative FCFF outcome may indicate that the firm faced either increased capital expenditures not offset by operating cash inflows or experienced reduced profitability impacting the cash available to stakeholders.
Interest Paid, Net of Tax
Western Digital Corp., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-07-01), 10-K (reporting date: 2021-07-02), 10-K (reporting date: 2020-07-03), 10-K (reporting date: 2019-06-28), 10-K (reporting date: 2018-06-29).
2 2023 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= × =
The effective income tax rate (EITR) for the periods analyzed shows notable variability. Starting at a high of 68% in the fiscal year ending June 29, 2018, the rate significantly decreased to 21% in the following fiscal year and remained around this level for the years ending June 28, 2019, and July 3, 2020. Thereafter, it declined further to 11% in the year ending July 2, 2021, before increasing again to 29% in the fiscal year ending July 1, 2022, and then dropping back to 21% in the year ending June 30, 2023. This fluctuation indicates variability in effective tax strategies or changes in tax regulations impacting the company’s tax expenditure.
Regarding cash paid for interest, net of tax, the amount initially increased from $227 million in 2018 to a peak of $340 million in 2019. Subsequently, it decreased to $294 million and then to $252 million in the following two years. A further decline was observed in 2022, reaching $174 million, which is the lowest in the six-year span. However, in the most recent fiscal year ending in 2023, cash paid for interest rose again to $232 million. Overall, the trend shows fluctuations with an initial increase, a mid-term decline, and a slight recovery most recently, reflecting possibly changing debt levels, interest rates, or refinancing activities.
Enterprise Value to FCFF Ratio, Current
Western Digital Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Apple Inc. | |
| Arista Networks Inc. | |
| Cisco Systems Inc. | |
| Dell Technologies Inc. | |
| Super Micro Computer Inc. | |
| EV/FCFF, Sector | |
| Technology Hardware & Equipment | |
| EV/FCFF, Industry | |
| Information Technology | |
Based on: 10-K (reporting date: 2023-06-30).
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
Western Digital Corp., historical EV/FCFF calculation, comparison to benchmarks
| Jun 30, 2023 | Jul 1, 2022 | Jul 2, 2021 | Jul 3, 2020 | Jun 28, 2019 | Jun 29, 2018 | ||
|---|---|---|---|---|---|---|---|
| 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 | |||||||
| Apple Inc. | |||||||
| Arista Networks Inc. | |||||||
| Cisco Systems Inc. | |||||||
| Dell Technologies Inc. | |||||||
| Super Micro Computer Inc. | |||||||
| EV/FCFF, Sector | |||||||
| Technology Hardware & Equipment | |||||||
| EV/FCFF, Industry | |||||||
| Information Technology | |||||||
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-07-01), 10-K (reporting date: 2021-07-02), 10-K (reporting date: 2020-07-03), 10-K (reporting date: 2019-06-28), 10-K (reporting date: 2018-06-29).
3 2023 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
The analysis of the financial data reveals several important trends regarding enterprise value, free cash flow to the firm (FCFF), and the EV to FCFF ratio over the six-year period.
- Enterprise Value (EV)
- Enterprise value demonstrates a fluctuating pattern. It starts at 24,758 million US dollars in 2018, decreases to 22,655 million in 2019, and further declines to 17,975 million in 2020. A notable increase occurs in 2021 when EV rises sharply to 24,880 million, followed by a steady decrease over the next two years to 19,762 million in 2022 and 18,934 million in 2023.
- Free Cash Flow to the Firm (FCFF)
- FCFF shows a declining trend from 2018, where it was at its highest at 3,623 million US dollars. It sharply reduces to 1,130 million in 2019 and continues to decrease more modestly to 471 million in 2020. Some recovery is observed in 2021 and 2022, with 1,147 million and 947 million respectively, but it turns negative in 2023 reaching -983 million, indicating a potential cash flow challenge.
- EV/FCFF Ratio
- The EV to FCFF ratio exhibits significant volatility. It begins at a low value of 6.83 in 2018, reflecting relatively strong free cash flow relative to enterprise value. However, the ratio sharply increases in the following years, peaking at 38.17 in 2020, indicative of much lower free cash flow in relation to enterprise value. Though it declines somewhat in 2021 and 2022 to 21.69 and 20.87 respectively, this is still considerably higher than the starting point, suggesting that free cash flow is under pressure relative to enterprise valuation. No value is available for 2023, likely due to negative FCFF.
Overall, the data shows a company experiencing fluctuations in valuation and deteriorating free cash flow over time, culminating in a negative free cash flow in the most recent period. The EV/FCFF ratio trends point to decreasing cash flow efficiency relative to enterprise value, which could be a concern for financial sustainability and valuation metrics going forward.