Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Chevron Corp., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
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The financial information reveals fluctuations in both net cash provided by operating activities and free cash flow to the firm over the five-year period. A significant increase in operating cash flow occurred between 2021 and 2022, followed by a period of relative stabilization and then decline.
- Net Cash from Operations
- Net cash provided by operating activities demonstrated substantial growth from US$29,187 million in 2021 to US$49,602 million in 2022. This represents a 70.4% increase. Subsequent years show a decrease to US$35,609 million in 2023, followed by further reductions to US$31,492 million in 2024 and US$33,939 million in 2025. While 2025 shows a slight recovery from 2024, the level remains below the 2022 peak and is only modestly above 2023 levels.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm mirrored the trend in operating cash flow, increasing markedly from US$21,683 million in 2021 to US$38,086 million in 2022, a 75.5% rise. FCFF then experienced a considerable decline to US$20,224 million in 2023, continuing downward to US$15,538 million in 2024. A modest increase is observed in 2025, with FCFF reaching US$17,298 million. Despite this increase, the 2025 value remains substantially lower than the 2022 high and is comparable to the 2021 level.
The correlation between net cash from operations and FCFF is strong, suggesting that changes in operating performance are a primary driver of free cash flow. The substantial decrease in both metrics from 2022 to 2024 warrants further investigation to determine the underlying causes, such as changes in revenue, expenses, or working capital requirements. The slight recovery in 2025 may indicate a stabilization of these factors, but continued monitoring is necessary to assess the sustainability of this trend.
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Interest Paid, Net of Tax
Chevron Corp., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
2 2025 Calculation
Cash payments for interest on debt, net of capitalized interest, tax = Cash payments for interest on debt, net of capitalized interest × EITR
= 942 × 36.80% = 347
3 2025 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= 175 × 36.80% = 64
The period under review demonstrates fluctuations in both cash payments for interest on debt, net of tax, and the effective income tax rate. Capitalized interest, net of tax, exhibits a generally increasing trend.
- Cash Payments for Interest on Debt
- Cash payments for interest on debt, net of tax, decreased from 507 US$ million in 2021 to 376 US$ million in 2022, representing a reduction of approximately 26%. A further decrease was observed in 2023, falling to 337 US$ million. However, these payments increased to 379 US$ million in 2024 before rising significantly to 595 US$ million in 2025. This suggests a potential increase in debt levels or interest rates towards the end of the period.
- Effective Income Tax Rate
- The effective income tax rate experienced a slight increase from 27.50% in 2021 to 28.30% in 2022. It then decreased to 27.60% in 2023, followed by substantial increases to 35.50% in 2024 and 36.80% in 2025. These increases in the effective income tax rate could be attributable to changes in tax legislation, shifts in the geographic distribution of profits, or alterations in the composition of taxable income.
- Capitalized Interest
- Capitalized interest, net of tax, showed a consistent upward trend throughout the period. Starting at 46 US$ million in 2021, it rose to 82 US$ million in 2022, 107 US$ million in 2023, and 115 US$ million in 2024. While the rate of increase slowed, it remained at 111 US$ million in 2025. This indicates a sustained level of investment in projects where borrowing costs are being capitalized as part of the asset’s cost.
The interplay between these three items suggests a dynamic financial landscape. The increase in cash interest payments alongside a rising effective income tax rate in the later years could indicate a growing tax burden on interest expense, or a larger overall interest expense due to increased borrowing. The consistent capitalization of interest suggests ongoing investment activity, which may contribute to future earnings.
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Enterprise Value to FCFF Ratio, Current
Chevron Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 449,660) |
| Free cash flow to the firm (FCFF) | 17,298) |
| Valuation Ratio | |
| EV/FCFF | 26.00 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| ConocoPhillips | 21.59 |
| Exxon Mobil Corp. | 28.60 |
| EV/FCFF, Sector | |
| Oil, Gas & Consumable Fuels | 26.57 |
| EV/FCFF, Industry | |
| Energy | 25.87 |
Based on: 10-K (reporting date: 2025-12-31).
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
Chevron Corp., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 410,012) | 294,868) | 300,274) | 315,004) | 289,060) | |
| Free cash flow to the firm (FCFF)2 | 17,298) | 15,538) | 20,224) | 38,086) | 21,683) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 23.70 | 18.98 | 14.85 | 8.27 | 13.33 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| ConocoPhillips | 18.77 | 16.31 | 15.38 | 7.43 | 10.72 | |
| Exxon Mobil Corp. | 26.85 | 15.76 | 12.47 | 7.84 | 10.06 | |
| EV/FCFF, Sector | ||||||
| Oil, Gas & Consumable Fuels | 24.46 | 16.71 | 13.63 | 7.91 | 11.15 | |
| EV/FCFF, Industry | ||||||
| Energy | 23.94 | 16.61 | 13.96 | 8.54 | 11.54 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= 410,012 ÷ 17,298 = 23.70
4 Click competitor name to see calculations.
The Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio exhibits considerable fluctuation over the observed period. Initial values indicate a relatively high valuation compared to generated cash flow, followed by a period of decline, and then a subsequent increase.
- Enterprise Value (EV)
- Enterprise Value increased from US$289,060 million in 2021 to US$315,004 million in 2022. A decrease was then observed in 2023, falling to US$300,274 million, and continuing slightly in 2024 to US$294,868 million. A significant increase is then noted in 2025, reaching US$410,012 million.
- Free Cash Flow to the Firm (FCFF)
- Free Cash Flow to the Firm demonstrated a substantial increase from US$21,683 million in 2021 to US$38,086 million in 2022. However, FCFF decreased significantly in 2023 to US$20,224 million, and continued to decline in 2024 to US$15,538 million. A modest recovery is seen in 2025, with FCFF reaching US$17,298 million.
- EV/FCFF Ratio
- The EV/FCFF ratio began at 13.33 in 2021, then decreased substantially to 8.27 in 2022, reflecting the increase in FCFF. The ratio increased again in 2023 to 14.85, driven by the decline in FCFF. Further increases were observed in 2024, reaching 18.98, and then in 2025, reaching 23.70. This indicates that the enterprise value is growing at a faster rate than free cash flow to the firm in the later years of the period.
The observed trend suggests a period of initial undervaluation relative to cash flow in 2022, followed by increasing valuation relative to cash flow in subsequent years. The substantial increase in the EV/FCFF ratio in 2025 warrants further investigation to determine the underlying drivers of the enterprise value increase and the relative stagnation of free cash flow.
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