.Enterprise Value to FCFF (EV/FCFF)
Difficulty: Intermediate
Free Cash Flow to The Firm (FCFF)
Delta Air Lines Inc., 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 | |||||
| | Net noncash charges | |||||
| | Changes in certain assets and liabilities | |||||
| | Net cash provided by operating activities | |||||
| | Cash paid for interest, net of tax1 | |||||
| | Property and equipment additions | |||||
| | Flight and ground equipment acquired under capital leases | |||||
| | 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 Delta Air Lines Inc.'s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. | Delta Air Lines Inc.'s FCFF declined from 2015 to 2016 and from 2016 to 2017. |
Interest Paid, Net of Tax
Delta Air Lines Inc., 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 | ||||||
| | Cash paid for interest, before tax | |||||
| | Less: Cash paid for interest, tax2 | |||||
| | Cash paid for interest, net of tax | |||||
2017 Calculations
2 Cash paid for interest, tax = Cash paid for interest × EITR
= × % =
Enterprise Value to FCFF Ratio, Current
Delta Air Lines Inc., 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 | |
| Booking Holdings Inc. | |
| Marriott International Inc. | |
| McDonald's Corp. | |
| Starbucks Corp. | |
| EV/FCFF, Sector | |
| Travel & Leisure | |
| EV/FCFF, Industry | |
| Consumer Services | |
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
Delta Air Lines Inc., 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 | ||||||
| Booking Holdings Inc. | ||||||
| Marriott International Inc. | ||||||
| McDonald's Corp. | ||||||
| Starbucks Corp. | ||||||
| EV/FCFF, Sector | ||||||
| Travel & Leisure | ||||||
| EV/FCFF, Industry | ||||||
| Consumer Services | ||||||
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. | Delta Air Lines Inc.'s EV/FCFF ratio increased from 2015 to 2016 and from 2016 to 2017. |
