.Enterprise Value to FCFF (EV/FCFF)
Difficulty: Intermediate
Free Cash Flow to The Firm (FCFF)
AbbVie Inc., FCFF calculation
USD $ in millions
| 12 months ended | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|---|
| | Net earnings | |||||
| | Net noncash charges | |||||
| | Changes in operating assets and liabilities, net of acquisitions | |||||
| | Cash flows from operating activities | |||||
| | Interest paid, net of portion capitalized, net of tax1 | |||||
| | Acquisitions of property and equipment | |||||
| | Free cash flow to the firm (FCFF) |
| Item | Description | The company |
|---|---|---|
| FCFF | Free cash flow to the firm is the cash flow available to the AbbVie Inc.'s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. | AbbVie Inc.'s FCFF declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level. |
Interest Paid, Net of Tax
AbbVie Inc., interest paid, net of tax calculation
USD $ in millions
| 12 months ended | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|---|
| Effective Income Tax Rate (EITR) | ||||||
| | EITR1 | % | % | % | % | % |
| Interest Paid, Net of Tax | ||||||
| | Interest paid, net of portion capitalized, before tax | |||||
| | Less: Interest paid, net of portion capitalized, tax2 | |||||
| | Interest paid, net of portion capitalized, net of tax | |||||
2017 Calculations
2 Interest paid, net of portion capitalized, tax = Interest paid, net of portion capitalized × EITR
= × % =
Enterprise Value to FCFF Ratio, Current
AbbVie Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (USD $ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors | |
| Abbott Laboratories | |
| Allergan PLC | |
| Amgen Inc. | |
| Biogen Inc. | |
| Bristol-Myers Squibb Co. | |
| Celgene Corp. | |
| Eli Lilly & Co. | |
| Gilead Sciences Inc. | |
| Johnson & Johnson | |
| Merck & Co. Inc. | |
| Pfizer Inc. | |
| Regeneron Pharmaceuticals Inc. | |
| EV/FCFF, Sector | |
| Pharmaceuticals & Biotechnology | |
| EV/FCFF, Industry | |
| Health Care | |
If company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
AbbVie Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| | Enterprise value (EV)1 | |||||
| | Free cash flow to the firm (FCFF)2 | |||||
| Ratio | ||||||
| | EV/FCFF3 | |||||
| Benchmarks | ||||||
| EV/FCFF, Competitors | ||||||
| Abbott Laboratories | ||||||
| Allergan PLC | ||||||
| Amgen Inc. | ||||||
| Biogen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Celgene Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| EV/FCFF, Sector | ||||||
| Pharmaceuticals & Biotechnology | ||||||
| EV/FCFF, Industry | ||||||
| Health Care | ||||||
2017 Calculations
3 EV/FCFF = EV ÷ FCFF
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| EV/FCFF | Enterprise value to free cash flow to the firm is whole company valuation indicator. | AbbVie Inc.'s EV/FCFF ratio increased from 2015 to 2016 and from 2016 to 2017. |
