Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Altria Group Inc., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
A consistent upward trajectory is observed in both net cash provided by operating activities and free cash flow to the firm (FCFF) between 2019 and 2023. While a marginal contraction occurred in 2022, the period concluded with a significant acceleration in cash generation during 2023, indicating robust liquidity and cash flow resilience.
- Operating Cash Flow Trends
- Net cash provided by operating activities increased from US$ 7,837 million in 2019 to US$ 9,287 million in 2023. The growth was steady through 2021, followed by a slight dip to US$ 8,256 million in 2022, before experiencing a notable surge of approximately 12.5% in the 2023 fiscal year.
- Free Cash Flow to the Firm (FCFF) Performance
- FCFF exhibited a similar growth pattern, rising from US$ 8,462 million in 2019 to a peak of US$ 9,921 million in 2023. This represents a total increase of approximately 17.2% over the five-year period. The performance remained relatively stable between 2020 and 2022, with a minor retraction in 2022 that mirrored the trend in operating cash flows.
- Comparative Analysis of Cash Metrics
- FCFF remained consistently higher than the net cash provided by operating activities across all reported years. This persistent gap suggests that adjustments—likely including the add-back of after-tax interest expenses—consistently increase the cash available to all capital providers relative to the cash generated solely from operations.
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Interest Paid, Net of Tax
Altria Group Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
2 2023 Calculation
Cash paid, interest, tax = Cash paid, interest × EITR
= 1,116 × 25.60% = 286
The analysis of cash outflows for interest, net of tax, reveals a period of fluctuation between 2019 and 2023, characterized by a mid-period decline followed by a recovery. Net interest expenditures remained relatively contained, oscillating within a range of 769 million to 873 million USD.
- Net Interest Payment Trends
- A downward trend in net cash paid for interest was observed from 2019 through 2021, with payments decreasing from 871 million USD to a five-year low of 769 million USD. This trend reversed in 2022, as payments rose to a peak of 873 million USD, before moderating to 830 million USD by the end of 2023.
- Effective Income Tax Rate (EITR) Dynamics
- The effective income tax rate exhibited significant volatility over the analyzed period. The rate increased sharply from 21.00% in 2019 to 35.40% in 2020, remaining nearly stagnant at 35.30% in 2021. A substantial contraction followed in 2022, with the rate dropping to 22.00%, before rising slightly to 25.60% in 2023.
- Relationship Between Tax Rates and Net Outflows
- There is a observable inverse relationship between the effective income tax rate and the net cash paid for interest. The highest net cash outflow in 2022 coincided with one of the lowest tax rates in the sequence. This suggests that the reduction in the tax shield during 2022 increased the net cash burden of interest payments, whereas the elevated tax rates of 2020 and 2021 served to lower the net cash impact of interest obligations.
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Enterprise Value to FCFF Ratio, Current
Altria Group Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 114,897) |
| Free cash flow to the firm (FCFF) | 9,921) |
| Valuation Ratio | |
| EV/FCFF | 11.58 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Coca-Cola Co. | 63.42 |
| Mondelēz International Inc. | 28.80 |
| PepsiCo Inc. | 22.93 |
| Philip Morris International Inc. | 30.10 |
| EV/FCFF, Sector | |
| Food, Beverage & Tobacco | 33.26 |
| EV/FCFF, Industry | |
| Consumer Staples | 44.99 |
Based on: 10-K (reporting date: 2023-12-31).
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
Altria Group Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 94,723) | 105,800) | 117,052) | 105,651) | 104,984) | |
| Free cash flow to the firm (FCFF)2 | 9,921) | 8,924) | 9,005) | 8,959) | 8,462) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 9.55 | 11.86 | 13.00 | 11.79 | 12.41 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Coca-Cola Co. | 26.54 | 27.95 | 25.28 | — | — | |
| Mondelēz International Inc. | 31.39 | 34.05 | 31.98 | — | — | |
| PepsiCo Inc. | 28.63 | 40.39 | 33.08 | — | — | |
| Philip Morris International Inc. | 20.71 | 19.53 | 16.35 | — | — | |
| EV/FCFF, Sector | ||||||
| Food, Beverage & Tobacco | 26.10 | 28.47 | 24.71 | — | — | |
| EV/FCFF, Industry | ||||||
| Consumer Staples | 30.22 | 30.06 | 20.91 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
3 2023 Calculation
EV/FCFF = EV ÷ FCFF
= 94,723 ÷ 9,921 = 9.55
4 Click competitor name to see calculations.
The financial trajectory from 2019 to 2023 is characterized by a notable divergence between market valuation and operational cash flow generation. While the enterprise value experienced a period of volatility followed by a decline, the free cash flow to the firm demonstrated a consistent upward trend, resulting in a significant compression of the valuation multiple by the end of the period.
- Enterprise Value Trends
- The enterprise value remained relatively stable between 2019 and 2020 before reaching a peak of 117,052 million US$ in 2021. Following this peak, a clear downward trend emerged, with the value decreasing to 105,800 million US$ in 2022 and further contracting to 94,723 million US$ by December 31, 2023.
- Free Cash Flow to the Firm (FCFF) Performance
- Operational cash generation showed a steady positive progression. FCFF increased from 8,462 million US$ in 2019 to 9,005 million US$ in 2021. After a marginal dip to 8,924 million US$ in 2022, the figure rose sharply to 9,921 million US$ in 2023, representing the highest cash flow level recorded during the five-year period.
- EV/FCFF Ratio Interpretation
- The EV/FCFF ratio fluctuated within a range of 11.79 to 13.00 between 2019 and 2022, suggesting a period of relative stability in how the market priced the company's cash flows. In 2023, the ratio dropped significantly to 9.55. This contraction is the mathematical result of a decreasing enterprise value occurring simultaneously with increasing free cash flow, indicating that the company's valuation has decreased relative to its ability to generate cash for the firm.
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