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: 2026-01-30), 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).
The financial information reveals fluctuations in cash flow from operations and free cash flow to the firm over a five-year period. A significant decline in both metrics is apparent between 2021 and 2023, followed by a partial recovery in subsequent years.
- Change in Cash from Operating Activities
- Cash generated from operating activities decreased substantially from US$11,407 million in 2021 to US$3,565 million in 2023. This represents a considerable contraction in the company’s ability to generate cash from its core business operations. A rebound occurred in 2024, reaching US$8,676 million, and continued into 2025 at US$4,521 million, before increasing again to US$11,185 million in 2026, approaching the 2021 level.
- Free Cash Flow to the Firm (FCFF)
- FCFF mirrored the trend observed in operating cash flow. It decreased from US$11,501 million in 2021 to a low of US$1,440 million in 2023. A recovery began in 2024, with FCFF reaching US$7,102 million. This upward trend continued, albeit at a slower pace, to US$3,050 million in 2025, and then accelerated to US$9,658 million in 2026. The FCFF values generally track the changes in cash from operating activities, suggesting a strong correlation between the two.
The period between 2023 and 2026 demonstrates a recovery in both operating cash flow and FCFF. However, the volatility observed suggests potential underlying business factors impacting cash generation. The return to levels approaching those seen in 2021 in 2026 indicates a potential stabilization, but continued monitoring is warranted to assess the sustainability of this improvement.
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Interest Paid, Net of Tax
Dell Technologies Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2026-01-30), 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).
2 2026 Calculation
Interest paid, tax = Interest paid × EITR
= 1,354 × 18.30% = 248
The relationship between the effective income tax rate and interest paid, net of tax, exhibits notable fluctuations over the observed period. Interest paid, net of tax, demonstrates a decreasing trend initially, followed by a period of relative stabilization and slight increase. The effective income tax rate shows considerable volatility throughout the period.
- Interest Paid, Net of Tax
- Interest paid, net of tax, decreased significantly from $2,176 million in 2021 to $878 million in 2023. This represents a substantial reduction over two years. Subsequently, interest expense increased to $1,182 million in 2024 and remained relatively stable at $1,181 million in 2025, before decreasing slightly to $1,106 million in 2026. The stabilization in the later years suggests a potential leveling off of debt-related expenses or changes in financing strategies.
- Effective Income Tax Rate
- The effective income tax rate experienced a dramatic increase from 4.50% in 2021 to 16.60% in 2022, and further to 24.90% in 2023. This indicates a significant change in the company’s tax burden, potentially due to alterations in tax laws, jurisdictional income mix, or the utilization of tax credits. The rate then decreased to 17.80% in 2024, followed by a substantial drop to 9.40% in 2025, before rising again to 18.30% in 2026. This volatility suggests the presence of non-recurring tax events or strategic tax planning initiatives.
The interplay between these two items is complex. While interest paid decreased substantially between 2021 and 2023, the effective income tax rate increased significantly over the same period. The subsequent stabilization of interest paid alongside continued fluctuations in the effective income tax rate suggests that changes in tax policy or tax planning are having a more pronounced effect on net income than changes in interest expense in the later years of the period.
Further investigation into the drivers behind the effective income tax rate fluctuations is recommended to understand the underlying causes and potential implications for future financial performance.
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Enterprise Value to FCFF Ratio, Current
Dell Technologies Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 291,344) |
| Free cash flow to the firm (FCFF) | 9,658) |
| Valuation Ratio | |
| EV/FCFF | 30.17 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Apple Inc. | 44.63 |
| Arista Networks Inc. | 49.16 |
| Cisco Systems Inc. | 33.48 |
| Lumentum Holdings Inc. | — |
| Super Micro Computer Inc. | 13.45 |
| EV/FCFF, Sector | |
| Technology Hardware & Equipment | 45.01 |
| EV/FCFF, Industry | |
| Information Technology | 56.21 |
Based on: 10-K (reporting date: 2026-01-30).
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 30, 2026 | Jan 31, 2025 | Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Enterprise value (EV)1 | 121,060) | 90,018) | 99,381) | 50,224) | 58,271) | 106,727) | |
| Free cash flow to the firm (FCFF)2 | 9,658) | 3,050) | 7,102) | 1,440) | 9,033) | 11,501) | |
| Valuation Ratio | |||||||
| EV/FCFF3 | 12.53 | 29.51 | 13.99 | 34.88 | 6.45 | 9.28 | |
| Benchmarks | |||||||
| EV/FCFF, Competitors4 | |||||||
| Apple Inc. | — | 40.91 | 31.36 | 27.21 | 22.40 | 26.45 | |
| Arista Networks Inc. | — | 39.60 | 33.39 | 39.01 | 89.98 | 38.47 | |
| Cisco Systems Inc. | — | 19.06 | 19.55 | 10.98 | 13.55 | 15.50 | |
| Lumentum Holdings Inc. | — | — | — | 72.26 | 14.52 | 8.11 | |
| Super Micro Computer Inc. | — | 16.54 | — | 21.06 | — | 25.04 | |
| EV/FCFF, Sector | |||||||
| Technology Hardware & Equipment | — | 37.81 | 30.41 | 24.97 | 20.80 | 23.54 | |
| EV/FCFF, Industry | |||||||
| Information Technology | — | 43.77 | 39.11 | 34.01 | 26.44 | 27.44 | |
Based on: 10-K (reporting date: 2026-01-30), 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).
3 2026 Calculation
EV/FCFF = EV ÷ FCFF
= 121,060 ÷ 9,658 = 12.53
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 ratio, followed by a significant decrease, a subsequent spike, and then a moderating trend.
- Enterprise Value (EV)
- Enterprise Value decreased substantially from 2021 to 2022, falling from US$106,727 million to US$58,271 million. It continued to decline to US$50,224 million in 2023 before experiencing a notable increase to US$99,381 million in 2024. This upward trend continued, albeit at a slower pace, reaching US$90,018 million in 2025 and further increasing to US$121,060 million in 2026.
- Free Cash Flow to the Firm (FCFF)
- Free Cash Flow to the Firm also decreased from 2021 to 2023, moving from US$11,501 million to US$9,033 million and then plummeting to US$1,440 million. A recovery began in 2024, with FCFF rising to US$7,102 million. This positive momentum continued, reaching US$3,050 million in 2025 and US$9,658 million in 2026.
- EV/FCFF Ratio
- The EV/FCFF ratio began at 9.28 in 2021 and decreased to 6.45 in 2022. A dramatic increase occurred in 2023, with the ratio reaching 34.88, largely due to the significant decline in FCFF. The ratio decreased to 13.99 in 2024 as FCFF recovered. It then increased again to 29.51 in 2025, before decreasing to 12.53 in 2026. The fluctuations suggest a dynamic relationship between the company’s enterprise value and its cash flow generation.
The substantial increase in the EV/FCFF ratio in 2023 warrants further investigation, as it indicates a significant premium placed on the enterprise value relative to the generated free cash flow. The subsequent moderation of this ratio in 2024 and 2026, coupled with increasing FCFF, suggests a potential stabilization of the valuation. However, the continued volatility of the ratio indicates ongoing sensitivity to changes in both enterprise value and free cash flow.
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