Enterprise Value to FCFF (EV/FCFF)
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Altria Group Inc. pages available for free this week:
- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Price to FCFE (P/FCFE)
- Selected Financial Data since 2005
- Return on Assets (ROA) since 2005
- Debt to Equity since 2005
- Analysis of Revenues
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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).
- Net cash provided by operating activities
- The net cash provided by operating activities shows a generally positive trajectory over the five-year period. Starting at $7,837 million in 2019, it increased to $8,385 million in 2020 and slightly rose to $8,405 million in 2021. However, there was a minor decline to $8,256 million in 2022 before recovering to a higher level of $9,287 million in 2023. This overall trend indicates a strong and somewhat stable cash generation capacity from core business operations with a brief dip in 2022.
- Free cash flow to the firm (FCFF)
- The free cash flow to the firm (FCFF) followed a consistent upward trend across the five years. Beginning at $8,462 million in 2019, it increased each year, reaching $8,959 million in 2020, $9,005 million in 2021, and $8,924 million in 2022. The FCFF experienced a notable rise in 2023, reaching $9,921 million. The pattern reflects effective cash management and suggests the company has been generating sufficient cash after accounting for capital expenditures, supporting potential reinvestment, debt repayment, or shareholder distributions.
- Comparative Insights
- Both net cash provided by operating activities and FCFF exhibit growth over the period, with FCFF consistently slightly exceeding operating cash flow, implying controlled capital expenditure or investments. The temporary dip in operating cash flow in 2022 was not mirrored significantly in FCFF, suggesting capital expenditures remained stable or were managed effectively during that year. The pronounced increase in 2023 in both metrics highlights a potential improvement in operational efficiency or other favorable business conditions supporting cash generation.
Interest Paid, Net of Tax
Altria Group Inc., interest paid, net of tax calculation
US$ 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
= × =
The analysis of the effective income tax rate (EITR) over the five-year period reveals notable fluctuations. The rate started at 21% in 2019, followed by a significant increase to approximately 35.4% in 2020 and a similar level of 35.3% in 2021. In 2022, there was a substantial decrease to 22%, followed by a moderate increase to 25.6% in 2023. This variation suggests changes in tax policy, financial strategies, or earnings composition that impacted the company's tax expenses relative to its pre-tax income.
Regarding the cash paid for interest, net of tax, the figures exhibit a relatively stable trend within a narrow range across the evaluated years. Interest payments were highest at $871 million in 2019 and then decreased to $805 million in 2020, with a further decline to $769 million in 2021. In 2022, the cash paid for interest increased again to $873 million, nearly returning to the 2019 level, before slightly decreasing to $830 million in 2023. These changes indicate relatively consistent debt servicing costs, with some fluctuations that could be attributed to changes in debt levels, interest rates, or tax effects on interest expenses.
Enterprise Value to FCFF Ratio, Current
Altria Group Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Coca-Cola Co. | |
| Mondelēz International Inc. | |
| PepsiCo Inc. | |
| Philip Morris International Inc. | |
| EV/FCFF, Sector | |
| Food, Beverage & Tobacco | |
| EV/FCFF, Industry | |
| Consumer Staples | |
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 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
| EV/FCFF, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| EV/FCFF, Industry | ||||||
| Consumer Staples | ||||||
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
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV) Trends
- The enterprise value exhibited fluctuations over the five-year period. It increased slightly from 104,984 million US dollars at the end of 2019 to a peak of 117,052 million in 2021. Following this, there was a steady decline, reaching 94,723 million by the end of 2023. This indicates a contraction in market valuation after the 2021 peak.
- Free Cash Flow to the Firm (FCFF) Trends
- The free cash flow to the firm showed a generally positive trend. Starting at 8,462 million US dollars in 2019, it increased consistently to reach 9,921 million by the end of 2023. The growth was relatively stable with minor fluctuations, suggesting an improvement in the firm’s cash-generating capability over the period analyzed.
- EV to FCFF Ratio Analysis
- The EV/FCFF ratio demonstrated variability, moving from 12.41 in 2019 down to 9.55 in 2023, with some intermediate peaks and troughs. The ratio peaked at 13 in 2021, reflecting a higher valuation relative to free cash flow during that year. The subsequent decline to 9.55 in 2023 suggests the firm became less expensive relative to its cash flow, possibly indicating enhanced cash flow performance or reduced market valuation.
- Overall Interpretation
- The data indicates that while the enterprise value underwent a rise and subsequent decline, the free cash flow to the firm consistently improved. The declining EV/FCFF ratio towards the end of the period suggests the company’s valuation became more aligned with its underlying cash generation capacity, potentially signaling improved operational efficiency or market reassessment.