Enterprise Value to FCFF (EV/FCFF)
Paying user area
Try for free
3M Co. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Revenues
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to 3M Co. for $22.49.
This is a one-time payment. There is no automatic renewal.
We accept:
Free Cash Flow to The Firm (FCFF)
3M Co., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Net Cash Provided by Operating Activities
- The net cash provided by operating activities exhibited an upward trend from 2017 to 2020, increasing from $6,240 million to a peak of $8,113 million. This represents steady growth over four consecutive years. However, in 2021, there was a decline to $7,454 million, indicating a reduction in cash inflows generated from the company's core operations compared to the previous year.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm steadily increased between 2017 and 2020, moving from $5,027 million to $7,033 million. This suggests improving cash available to all capital providers after operating expenses and capital expenditures. Similar to operating cash flow, FCFF decreased in 2021 to $6,239 million, which marks a slight contraction from the previous year's level.
- Overall Analysis
- Both key cash flow metrics demonstrated consistent growth from 2017 through 2020, reflecting positive operational efficiency and cash generation capabilities. The peak values in 2020 suggest optimal performance during that period. The subsequent decline in 2021 may indicate emerging operational challenges, increased capital expenditure, or other factors impacting cash generation. The trend highlights the need for further investigation into the causes behind the 2021 decrease to assess sustainability of cash flow generation.
Interest Paid, Net of Tax
3M Co., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
2 2021 Calculation
Cash interest payments, tax = Cash interest payments × EITR
= × =
- Effective Income Tax Rate (EITR)
- The effective income tax rate shows a consistent downward trend over the five-year period. Starting at 25.4% in 2017, the rate steadily decreased each year to reach 17.8% by the end of 2021. This represents a significant reduction of approximately 7.6 percentage points, indicating either improved tax efficiency, changes in tax legislation, or strategic tax planning by the company.
- Cash Interest Payments, Net of Tax
- Cash interest payments, net of tax, exhibited an overall increasing trend from 2017 to 2020, rising from 160 million USD to 421 million USD. This represents an increase of approximately 163% over three years. However, in 2021, there was a decline to 388 million USD, reflecting a reduction of about 7.8% compared to the previous year. The initial rise could indicate increased debt levels or higher interest rates, while the decrease in 2021 may suggest debt repayment, restructuring, or lower borrowing costs.
Enterprise Value to FCFF Ratio, Current
3M Co., 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 | |
| Boeing Co. | |
| Caterpillar Inc. | |
| Eaton Corp. plc | |
| GE Aerospace | |
| Honeywell International Inc. | |
| Lockheed Martin Corp. | |
| RTX Corp. | |
| EV/FCFF, Sector | |
| Capital Goods | |
| EV/FCFF, Industry | |
| Industrials | |
Based on: 10-K (reporting date: 2021-12-31).
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
3M Co., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| 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 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| EV/FCFF, Sector | ||||||
| Capital Goods | ||||||
| EV/FCFF, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
3 2021 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
The analysis of the financial data over the five-year period reveals several key trends related to the enterprise value, free cash flow to the firm, and their ratio.
- Enterprise Value (EV)
- The enterprise value shows a consistent downward trend from 2017 to 2021. It decreased from $142,683 million in 2017 to $106,224 million in 2021. This represents a notable reduction in the company’s valuation based on market and debt considerations over the timeframe.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm increased from 2017 through 2020, rising from $5,027 million to a peak of $7,033 million in 2020. However, in 2021, there was a slight decline to $6,239 million. Despite the decrease in the final year, the overall trend within the period is positive, indicating improved cash generation capacity until 2020 with some moderation thereafter.
- EV/FCFF Ratio
- The EV to FCFF ratio decreased steadily from 28.39 in 2017 to 16.56 in 2020, reflecting improved valuation multiples relative to cash flow generation. In 2021, the ratio slightly increased to 17.03, suggesting a marginal rise in valuation multiples or a reduction in free cash flow efficiency compared to the prior year.
In summary, the enterprise value has been declining while the free cash flow to the firm increased over the majority of the period before a modest decline. The resulting valuation multiple (EV/FCFF) lowered significantly indicating potentially enhanced market valuation relative to cash flow, although a minor uptick in the last year indicates some stabilization or reversal of this trend.