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Caterpillar Inc. (CAT)
Enterprise Value to FCFF (EV/FCFF)
Difficulty: Intermediate
Free Cash Flow to The Firm (FCFF)
Caterpillar Inc., FCFF calculation
US$ in millions
Based on: 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17).
| Item | Description | The company |
|---|---|---|
| FCFF | Free cash flow to the firm is the cash flow available to the Caterpillar Inc.’s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. | Caterpillar Inc.’s FCFF increased from 2016 to 2017 and from 2017 to 2018. |
Interest Paid, Net of Tax
Caterpillar Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17).
2 2018 Calculation
Interest paid on short-term and long-term borrowings, tax = Interest paid on short-term and long-term borrowings × EITR
= × =
Enterprise Value to FCFF Ratio, Current
Caterpillar 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 | |
| Illinois Tool Works Inc. | |
| EV/FCFF, Sector | |
| Industrial Engineering | |
| EV/FCFF, Industry | |
| Industrials | |
Based on: 10-K (filing date: 2019-02-14).
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
Caterpillar Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
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| EV/FCFF, Competitors4 | ||||||
| Illinois Tool Works Inc. | |
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| EV/FCFF, Sector | ||||||
| Industrial Engineering | |
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| Industrials | |
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Based on: 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-17).
3 2018 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
| Valuation ratio | Description | The company |
|---|---|---|
| EV/FCFF | Enterprise value to free cash flow to the firm is whole company valuation indicator. | Caterpillar Inc.’s EV/FCFF ratio declined from 2016 to 2017 and from 2017 to 2018. |