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Coca-Cola Co. (KO)

Enterprise Value to FCFF (EV/FCFF)

Difficulty: Intermediate

Coca-Cola Co., FCFF calculation

USD $ in millions

	12 months ended	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Net income attributable to shareowners of The Coca-Cola Company
	Net income attributable to noncontrolling interests
	Net noncash charges
	Net change in operating assets and liabilities
	Net cash provided by operating activities
	Interest paid, net of tax¹
	Purchases of property, plant and equipment
	Proceeds from disposals of property, plant and equipment
	Free cash flow to the firm (FCFF)

Item	Description	The company
FCFF	Free cash flow to the firm is the cash flow available to the Coca-Cola Co.’s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Coca-Cola Co.’s FCFF declined from 2016 to 2017 but then increased from 2017 to 2018 not reaching 2016 level.

Coca-Cola Co., interest paid, net of tax calculation

USD $ in millions

	12 months ended	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Effective Income Tax Rate (EITR)

	EITR¹
	Interest Paid, Net of Tax
	Interest paid, before tax
	Less: Interest paid, tax²
	Interest paid, net of tax

2018 Calculations

² Interest paid, tax = Interest paid × EITR
= hidden × hidden = hidden

Coca-Cola Co., 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
PepsiCo Inc.
EV/FCFF, Sector
Beverages
EV/FCFF, Industry
Consumer Goods

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.

Coca-Cola Co., historical EV/FCFF calculation, comparison to benchmarks

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	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
	PepsiCo Inc.
	EV/FCFF, Sector
	Beverages
	EV/FCFF, Industry
	Consumer Goods

2018 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.	Coca-Cola Co.’s EV/FCFF ratio increased from 2016 to 2017 but then slightly declined from 2017 to 2018.

	Coca-Cola Co.	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

	All companies
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