Enterprise Value to FCFF (EV/FCFF)
Paying user area
Try for free
Eaton Corp. plc pages available for free this week:
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Eaton Corp. plc for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Free Cash Flow to The Firm (FCFF)
Eaton Corp. plc, FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Net cash provided by operating activities
- The net cash provided by operating activities showed some fluctuations over the five-year period. It started at $2,944 million in 2020 and declined to $2,163 million in 2021, indicating a decrease in cash generation from core operations during that year. However, there was a recovery in subsequent years, with the cash flow increasing to $2,533 million in 2022 and further accelerating to $3,624 million in 2023. The upward trend continued into 2024, reaching $4,327 million, marking the highest level over the period examined. This suggests a strengthening operational cash flow position over time despite initial volatility.
- Free cash flow to the firm (FCFF)
- The free cash flow to the firm mirrored a similar pattern as operating cash flow, although at slightly lower absolute values. Beginning at $2,726 million in 2020, FCFF declined to its lowest point of $1,771 million in 2021, reflecting reduced available cash after capital expenditures. Subsequent years saw a recovery, with FCFF increasing to $2,300 million in 2022 and then experiencing significant growth to $3,174 million in 2023. The positive momentum persisted into 2024 with free cash flow reaching $3,865 million. The trajectory over the years indicates improving cash generation capacity after investments, supporting financial flexibility and potentially enhancing valuation.
- General observations
- Both key cash flow metrics demonstrated an initial dip in 2021, followed by a consistent recovery and growth through to 2024. The improvement in operational cash flows and free cash flows suggests enhanced efficiency in operations and/or effective capital expenditure management in the later years. The trends point toward a strengthening liquidity and cash-generating ability, which is favorable for sustaining business activities, servicing debt, and possibly increasing shareholder returns over time.
Interest Paid, Net of Tax
Eaton Corp. plc, interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2 2024 Calculation
Interest paid on debt, tax = Interest paid on debt × EITR
= × =
- Effective Income Tax Rate (EITR)
- The effective income tax rate experienced a significant fluctuation over the five-year period. Initially, the rate increased from 19% in 2020 to a peak of 25.9% in 2021. This was followed by a sharp decline to 15.3% in 2022. Subsequently, the rate stabilized somewhat, with moderate increases to 15.8% in 2023 and 16.8% in 2024. Overall, after the initial spike, the tax rate trended downward and then slightly increased but remained well below the 2021 peak.
- Interest Paid on Debt, Net of Tax
- Interest payments on debt, net of tax, demonstrated a consistent upward trend throughout the analyzed period. Starting at US$175 million in 2020, interest expense decreased slightly to US$153 million in 2021. However, from 2021 onwards, there was a marked increase each year, rising to US$212 million in 2022, US$269 million in 2023, and reaching US$274 million in 2024. This pattern indicates growing debt service costs, which may reflect increased borrowing or rising interest rates.
Enterprise Value to FCFF Ratio, Current
Eaton Corp. plc, current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Boeing Co. | |
| Caterpillar Inc. | |
| GE Aerospace | |
| Honeywell International Inc. | |
| Lockheed Martin Corp. | |
| RTX Corp. | |
| EV/FCFF, Sector | |
| Capital Goods | |
| EV/FCFF, Industry | |
| Industrials | |
Based on: 10-K (reporting date: 2024-12-31).
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
Eaton Corp. plc, historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| EV/FCFF, Sector | ||||||
| Capital Goods | ||||||
| EV/FCFF, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value demonstrated an overall increasing trend from 59,819 million US dollars in 2020 to a peak of 122,149 million US dollars in 2023, reflecting more than a doubling over the four-year span. In 2024, there was a slight decrease to 120,944 million US dollars, indicating some stabilization after rapid growth.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm showed a fluctuating but generally upward trend. Starting at 2,726 million US dollars in 2020, it declined to 1,771 million US dollars in 2021, suggesting temporary pressure on cash generation. However, subsequent years showed recovery and strong growth, reaching 3,174 million in 2023 and further increasing to 3,865 million in 2024, marking a substantial improvement in cash flow over the period.
- EV/FCFF Ratio
- The valuation multiple EV/FCFF exhibited significant volatility. After starting at 21.94 in 2020, it surged sharply to 38.16 in 2021, indicating a rise in enterprise value relative to cash flow. This ratio decreased to 33.44 in 2022, rose again to a peak of 38.49 in 2023, before falling to 31.29 in 2024. The fluctuations in this ratio suggest varying market perceptions of valuation relative to the firm's cash-generating ability, with the highest valuations occurring in 2021 and 2023 corresponding with lower free cash flow values or rapid increases in enterprise value.