.Enterprise Value to FCFF (EV/FCFF)
Difficulty: Intermediate
Free Cash Flow to The Firm (FCFF)
Coca-Cola Co., FCFF calculation
USD $ in millions
| 12 months ended | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | |
|---|---|---|---|---|---|---|
| | 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 2015 to 2016 and from 2016 to 2017. |
Interest Paid, Net of Tax
Coca-Cola Co., 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, before tax | |||||
| | Less: Interest paid, tax2 | |||||
| | Interest paid, net of tax | |||||
2017 Calculations
2 Interest paid, tax = Interest paid × EITR
= × % =
Enterprise Value to FCFF Ratio, Current
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.
Enterprise Value to FCFF Ratio, Historical
Coca-Cola Co., 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 | ||||||
| PepsiCo Inc. | ||||||
| EV/FCFF, Sector | ||||||
| Beverages | ||||||
| EV/FCFF, Industry | ||||||
| Consumer Goods | ||||||
2017 Calculations
3 EV/FCFF = EV ÷ FCFF
= ÷ =
| 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 2015 to 2016 and from 2016 to 2017. |
