Caterpillar Inc. (CAT)

Enterprise Value to FCFF (EV/FCFF)

Difficulty: Intermediate

Free Cash Flow to The Firm (FCFF)
Interest Paid, Net of Tax
EV to FCFF Ratio, Current
EV to FCFF Ratio, Historical

Free Cash Flow to The Firm (FCFF)

Caterpillar Inc., FCFF calculation

USD $ in millions

	12 months ended	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Profit (loss) attributable to common stockholders
	Profit attributable to noncontrolling interests
	Net noncash charges
	Changes in assets and liabilities, net of acquisitions and divestitures
	Net cash provided by operating activities
	Interest paid on short-term and long-term borrowings, net of tax¹
	Capital expenditures, excluding equipment leased to others
	Expenditures for equipment leased to others
	Proceeds from disposals of leased assets and property, plant and equipment
	Free cash flow to the firm (FCFF)

¹ See Details »

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 declined from 2015 to 2016 but then increased from 2016 to 2017 not reaching 2015 level.

Interest Paid, Net of Tax

Caterpillar 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 on short-term and long-term borrowings, before tax
Less: Interest paid on short-term and long-term borrowings, tax²
Interest paid on short-term and long-term borrowings, net of tax

¹ See Details »

2017 Calculations

² Interest paid on short-term and long-term borrowings, tax = Interest paid on short-term and long-term borrowings × EITR
= hidden × hidden % = hidden

Enterprise Value to FCFF Ratio, Current

Caterpillar 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
Illinois Tool Works Inc.
EV/FCFF, Sector
Industrial Engineering
EV/FCFF, Industry
Industrials

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

Caterpillar 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
	Illinois Tool Works Inc.
	EV/FCFF, Sector
	Industrial Engineering
	EV/FCFF, Industry
	Industrials

¹ See Details »

² See Details »

2017 Calculations

³ EV/FCFF = EV ÷ FCFF
= hidden ÷ hidden = hidden

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 increased from 2015 to 2016 but then slightly declined from 2016 to 2017.

	Caterpillar Inc.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

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Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
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