Enterprise Value to FCFF (EV/FCFF)
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- Cash Flow Statement
- Analysis of Short-term (Operating) Activity Ratios
- Dividend Discount Model (DDM)
- Net Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Return on Assets (ROA) since 2005
- Total Asset Turnover since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Debt
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Free Cash Flow to The Firm (FCFF)
eBay Inc., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
- Operating Cash Flow Trend
- The net cash provided by operating activities shows a significant decline from 2014 to 2015, dropping from 5,677 million US dollars to 2,877 million US dollars. Following this steep reduction, the cash flow from operations remains relatively stable in 2016 at 2,827 million US dollars, with a slight increase in 2017 to 3,146 million US dollars, before decreasing again in 2018 to 2,661 million US dollars.
- Free Cash Flow to the Firm (FCFF) Pattern
- The FCFF exhibits a similar downward trend starting in 2014 with 4,407 million US dollars, falling sharply to 2,351 million US dollars in 2015. The figures stabilize in 2016 at 2,344 million US dollars, followed by a moderate increase to 2,665 million US dollars in 2017. However, there is a subsequent decline in 2018 to 2,302 million US dollars. This indicates a general contraction of free cash flow available to the firm over the period examined.
- Overall Financial Cash Flow Analysis
- Both operating cash flow and FCFF presented an initial sharp decrease from 2014 to 2015, then stabilized with minor fluctuations between 2016 and 2017, and again decreased by 2018. This trend may suggest challenges in maintaining operating efficiency or increasing operating expenses, affecting the cash generation capability of the firm. The parallel movement of FCFF with operating cash flow indicates that capital expenditures or other adjustments impacting free cash flow have remained proportionate relative to operating cash flow throughout the period.
Interest Paid, Net of Tax
eBay Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
2 2018 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= × =
- Effective Income Tax Rate (EITR)
- The effective income tax rate exhibited significant volatility over the five-year period. In 2014, the rate was exceptionally high at 98.7%, which then dropped sharply to 19.08% in 2015. In 2016 and 2017, the tax rate stabilized at 35%, indicating a consistent effective tax burden during these years. However, in 2018, the tax rate decreased substantially to 6.99%, representing a notable decline compared to the previous two years.
- Cash Paid for Interest, Net of Tax
- The cash paid for interest, net of tax, showed a clear upward trend throughout the analyzed period. Starting at $142 million in 2014, it remained relatively stable in 2015 at $143 million. From 2016 onwards, there was a marked increase each year: $185 million in 2016, $292 million in 2017, and continuing this growth trajectory through 2018. This steady rise suggests increasing interest expenses or borrowings over time.
Enterprise Value to FCFF Ratio, Current
eBay Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Amazon.com Inc. | |
| Home Depot Inc. | |
| Lowe’s Cos. Inc. | |
| TJX Cos. Inc. | |
Based on: 10-K (reporting date: 2018-12-31).
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
eBay Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| 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 | ||||||
| Amazon.com Inc. | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
3 2018 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited significant fluctuations over the observed period. Beginning at US$63,477 million in 2014, it decreased sharply to US$28,866 million in 2015. Subsequently, a recovery trend was observed, with values rising to US$36,629 million in 2016 and further increasing to US$47,034 million in 2017. However, this upward trajectory was interrupted in 2018, with the enterprise value declining to US$35,495 million.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm demonstrated a downward trend from 2014 through 2016, beginning at US$4,407 million and decreasing to approximately US$2,344 million by 2016. A modest recovery occurred in 2017 with a rise to US$2,665 million, but this was followed by another decline to US$2,302 million in 2018. Overall, the FCFF values remained substantially lower from 2015 onward compared to the initial year.
- EV/FCFF Ratio
- The EV/FCFF ratio reflected notable variability over the period. Starting at a relatively high level of 14.4 in 2014, the ratio decreased to 12.28 in 2015, indicating a lower enterprise value relative to cash flow. Nonetheless, from 2016 onward, the ratio increased consistently, peaking at 17.65 in 2017, before dropping slightly to 15.42 in 2018. This pattern suggests an increasing premium placed on the firm’s enterprise value in relation to its free cash flow after 2015.