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Colgate-Palmolive Co. (CL)

Enterprise Value to FCFF (EV/FCFF)

Difficulty: Intermediate

Colgate-Palmolive 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 Colgate-Palmolive Company
	Net income attributable to noncontrolling interests
	Net noncash charges
	Cash effects of changes in assets and liabilities
	Net cash provided by operations
	Interest paid, net of tax¹
	Interest capitalized, net of tax²
	Capital expenditures
	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 Colgate-Palmolive Co.’s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Colgate-Palmolive Co.’s FCFF declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.

Colgate-Palmolive 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
	Interest Costs Capitalized, Net of Tax
	Interest capitalized, before tax
	Less: Interest capitalized, tax³
	Interest capitalized, net of tax

2018 Calculations

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

³ Interest capitalized, tax = Interest capitalized × EITR
= hidden × hidden = hidden

Colgate-Palmolive 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
Kimberly-Clark Corp.
Nike Inc.
EV/FCFF, Sector
Personal Goods
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.

Colgate-Palmolive 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
	Kimberly-Clark Corp.
	Nike Inc.
	EV/FCFF, Sector
	Personal Goods
	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.	Colgate-Palmolive Co.’s EV/FCFF ratio declined from 2016 to 2017 and from 2017 to 2018.

	Colgate-Palmolive 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

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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
Analysis
Financial Reporting Quality