Stock Analysis on Net

Caterpillar Inc. (NYSE:CAT)

Enterprise Value to FCFF (EV/FCFF) 

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Free Cash Flow to The Firm (FCFF)

Caterpillar Inc., FCFF calculation

US$ in millions

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12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Profit attributable to common stockholders 6,489 2,998 6,093 6,147 754
Profit attributable to noncontrolling interests 4 5 1 1 5
Net noncash charges 1,352 3,741 3,748 4,487 5,137
Changes in assets and liabilities, net of acquisitions and divestitures (647) (417) (2,930) (4,077) (194)
Net cash provided by operating activities 7,198 6,327 6,912 6,558 5,702
Interest paid on short-term and long-term borrowings, net of tax1 725 815 820 830 371
Capital expenditures, excluding equipment leased to others (1,093) (978) (1,056) (1,276) (898)
Expenditures for equipment leased to others (1,379) (1,137) (1,613) (1,640) (1,438)
Proceeds from disposals of leased assets and property, plant and equipment 1,265 772 1,153 936 1,164
Free cash flow to the firm (FCFF) 6,716 5,799 6,216 5,408 4,901

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).

Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the Caterpillar Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. Caterpillar Inc. FCFF decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Interest Paid, Net of Tax

Caterpillar Inc., interest paid, net of tax calculation

US$ in millions

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12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Effective Income Tax Rate (EITR)
EITR1 21.20% 25.20% 22.40% 23.70% 67.20%
Interest Paid, Net of Tax
Interest paid on short-term and long-term borrowings, before tax 920 1,089 1,057 1,088 1,131
Less: Interest paid on short-term and long-term borrowings, tax2 195 274 237 258 760
Interest paid on short-term and long-term borrowings, net of tax 725 815 820 830 371

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).

1 See details »

2 2021 Calculation
Interest paid on short-term and long-term borrowings, tax = Interest paid on short-term and long-term borrowings × EITR
= 920 × 21.20% = 195


Enterprise Value to FCFF Ratio, Current

Caterpillar Inc., current EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Selected Financial Data (US$ in millions)
Enterprise value (EV) 166,236
Free cash flow to the firm (FCFF) 6,716
Valuation Ratio
EV/FCFF 24.75
Benchmarks
EV/FCFF, Competitors1
Boeing Co.
General Electric Co. 48.90
Honeywell International Inc. 27.37
Lockheed Martin Corp. 19.68
Northrop Grumman Corp. 41.47
Raytheon Technologies Corp. 27.99
EV/FCFF, Sector
Capital Goods 33.22
EV/FCFF, Industry
Industrials 25.39

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

Caterpillar Inc., historical EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 137,695 138,173 104,698 105,065 122,294
Free cash flow to the firm (FCFF)2 6,716 5,799 6,216 5,408 4,901
Valuation Ratio
EV/FCFF3 20.50 23.83 16.84 19.43 24.95
Benchmarks
EV/FCFF, Competitors4
Boeing Co. 16.40 16.93
General Electric Co. 56.53 32.34 15.85 40.85 22.13
Honeywell International Inc. 25.22 26.49 21.13 19.22 22.51
Lockheed Martin Corp. 13.92 14.64 21.21 41.00
Northrop Grumman Corp. 26.02 17.47 21.80 20.12
Raytheon Technologies Corp. 27.29 35.26 21.94 27.92 27.84
EV/FCFF, Sector
Capital Goods 31.18 70.42 25.21 23.82
EV/FCFF, Industry
Industrials 26.09 67.69 25.64 23.44

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).

1 See details »

2 See details »

3 2021 Calculation
EV/FCFF = EV ÷ FCFF
= 137,695 ÷ 6,716 = 20.50

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. EV/FCFF ratio increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.