Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Dell Technologies Inc., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).
- Change in cash from operating activities
- The cash generated from operating activities displayed an initial upward trend, increasing from 9,291 million USD in 2020 to a peak of 11,407 million USD in 2021. This was followed by a slight decline to 10,307 million USD in 2022. A significant drop was observed in 2023, where the figure fell sharply to 3,565 million USD. The cash flow recovered in 2024, rising to 8,676 million USD, but decreased again to 4,521 million USD in 2025. Overall, there is notable volatility with a peak early in the period and fluctuating values thereafter.
- Free cash flow to the firm (FCFF)
- FCFF showed a similar trend to operating cash flow but with larger fluctuations. Starting at 8,690 million USD in 2020, it rose to 11,501 million USD in 2021, followed by a decline to 9,033 million USD in 2022. A pronounced drop occurred in 2023, with free cash flow plummeting to 1,440 million USD. The following year presented a rebound to 7,102 million USD, yet the figure dropped again to 3,050 million USD in 2025. This pattern suggests significant variability in available free cash flow, which may imply changing capital expenditures or operational challenges affecting cash generation efficiency.
- General observations
- Both cash from operating activities and FCFF exhibit considerable fluctuation over the periods analyzed. After reaching peaks in 2021, both metrics demonstrated declines and instability in subsequent years, particularly in 2023 when sharp drops were recorded. Recovery phases in 2024 show some improvement, though the decline in 2025 suggests ongoing volatility. These patterns may indicate operational or market factors impacting cash flow stability and capital expenditure management, warranting further investigation into underlying causes to support future cash flow consistency.
Interest Paid, Net of Tax
Dell Technologies Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).
2 2025 Calculation
Interest paid, tax = Interest paid × EITR
= 1,304 × 9.40% = 123
- Effective Income Tax Rate (EITR) Trend
- The effective income tax rate exhibits notable volatility over the analyzed periods. Initially, there is a significant decline from 21% in January 2020 to 4.5% in January 2021, indicating a considerable reduction in tax burden during this time. Subsequently, the rate rises sharply to 16.6% by January 2022 and peaks at 24.9% in February 2023. Following this peak, the tax rate decreases again to 17.8% in February 2024 and further declines to 9.4% by January 2025. The overall pattern reflects fluctuating tax expenses with a pronounced peak in 2023 and a notable reduction in the latest period evaluated.
- Interest Paid, Net of Tax
- Interest payments, net of tax, show a distinct downward trend from January 2020 through February 2023, declining from US$1,975 million to a low of US$878 million. This decline suggests a reduction in interest-bearing debt or changes in interest rates or debt structure. However, starting in February 2024, the interest paid increases to US$1,182 million and remains relatively stable at US$1,181 million by January 2025. This reversal implies a possible increase in financing costs or additional borrowings after the earlier reduction period.
- Summary Insights
- The fiscal periods analyzed reveal a dynamic financial environment with fluctuating tax rates and changing interest expense profiles. The significant variations in the effective income tax rate could reflect changes in tax legislation, tax planning strategies, or varying profitability across jurisdictions. The initial reduction followed by a peak and subsequent decline in tax rate suggests strategic or operational shifts affecting taxable income or tax liabilities. Concurrently, the interest expenses' decline and subsequent rebound may indicate changes in capital structure, refinancing activities, or shifts in market interest rates impacting financing costs. These patterns merit further examination to understand underlying causes and their implications for the company’s financial strategy and risk management.
Enterprise Value to FCFF Ratio, Current
Dell Technologies Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 106,354) |
| Free cash flow to the firm (FCFF) | 3,050) |
| Valuation Ratio | |
| EV/FCFF | 34.87 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Apple Inc. | 29.09 |
| Arista Networks Inc. | 34.42 |
| Cisco Systems Inc. | 26.08 |
| Super Micro Computer Inc. | — |
| EV/FCFF, Sector | |
| Technology Hardware & Equipment | 29.06 |
| EV/FCFF, Industry | |
| Information Technology | 51.52 |
Based on: 10-K (reporting date: 2025-01-31).
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
Dell Technologies Inc., historical EV/FCFF calculation, comparison to benchmarks
| Jan 31, 2025 | Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Enterprise value (EV)1 | 90,018) | 99,381) | 50,224) | 58,271) | 106,727) | 76,138) | |
| Free cash flow to the firm (FCFF)2 | 3,050) | 7,102) | 1,440) | 9,033) | 11,501) | 8,690) | |
| Valuation Ratio | |||||||
| EV/FCFF3 | 29.51 | 13.99 | 34.88 | 6.45 | 9.28 | 8.76 | |
| Benchmarks | |||||||
| EV/FCFF, Competitors4 | |||||||
| Apple Inc. | — | 31.36 | 27.21 | 22.40 | 26.45 | 24.67 | |
| Arista Networks Inc. | — | 33.39 | 39.01 | 89.98 | 38.47 | 29.00 | |
| Cisco Systems Inc. | — | 19.55 | 10.98 | 13.55 | 15.50 | 10.47 | |
| Super Micro Computer Inc. | — | — | 21.06 | — | 25.04 | — | |
| EV/FCFF, Sector | |||||||
| Technology Hardware & Equipment | — | 30.34 | 24.95 | 20.82 | 23.63 | 21.09 | |
| EV/FCFF, Industry | |||||||
| Information Technology | — | 40.41 | 34.37 | 26.67 | 27.51 | 23.95 | |
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= 90,018 ÷ 3,050 = 29.51
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited notable fluctuations over the six-year period. Starting at approximately $76.1 billion in early 2020, the value increased significantly to around $106.7 billion by early 2021. Subsequently, a sharp decline occurred, reaching about $58.3 billion in early 2022 and further decreasing to approximately $50.2 billion in early 2023. A strong recovery was observed in early 2024, with the EV rising to nearly $99.4 billion, followed by a moderate decline to around $90.0 billion in early 2025. This pattern indicates periods of substantial volatility, influenced by market or operational factors impacting the company's overall valuation.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow demonstrated significant volatility over the same timeframe. The value increased initially from $8.7 billion in 2020 to a peak of $11.5 billion in 2021, then dropped to $9.0 billion in 2022. The most pronounced decrease occurred in 2023, where FCFF fell sharply to $1.44 billion. Recovery began in 2024, increasing to $7.1 billion, but declined again to $3.05 billion in 2025. This trend highlights challenges in maintaining stable cash generation, with the 2023 dip suggesting possible one-time impacts or operational difficulties during that year.
- EV/FCFF Ratio
- The valuation multiple represented by EV to FCFF showed wide-ranging variability, reflecting changes in both enterprise value and free cash flow. The ratio remained relatively stable around 8.8 to 9.3 between 2020 and 2021, then decreased to 6.45 in 2022, indicating more favorable valuation relative to cash flow. However, in 2023, this ratio surged dramatically to 34.88, driven primarily by the steep decline in free cash flow despite enterprise value stabilization. The ratio then fell to 13.99 in 2024 but rose again to 29.51 in 2025. These swings imply significant shifts in perceived value and operational performance, with valuation multiples becoming less favorable particularly when cash generation weakened.