Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Edwards Lifesciences Corp., FCFF calculation
US$ in thousands
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The analysis of the financial data over the five-year period reveals several notable trends regarding the company's cash flow activities.
- Net cash provided by operating activities
- There is a fluctuating pattern in net cash generated from operating activities, beginning at 1,000,700 thousand US dollars in 2017, followed by a decline to 926,800 thousand in 2018. Subsequently, the cash flow increased to 1,179,400 thousand in 2019, dipped again to 1,054,300 thousand in 2020, and then significantly rose to 1,732,100 thousand by the end of 2021. The overall trend indicates resilience with a strong rebound in the most recent year.
- Free cash flow to the firm (FCFF)
- Free cash flow to the firm shows a downward trend from 842,077 thousand US dollars in 2017 to 714,276 thousand in 2018, followed by a recovery to 918,908 thousand in 2019. The figure then declines notably to 664,874 thousand in 2020 but experiences a substantial increase to 1,420,139 thousand in 2021. This variation suggests that while the company faced pressures on free cash flow during 2018 and 2020, it managed to significantly improve this measure in the latest period.
In summary, both operating cash flow and free cash flow exhibit volatility over the analyzed years, with notable declines in 2018 and 2020 contrasted by strong recoveries in 2019 and particularly in 2021. The pronounced increase in 2021 for both metrics could be indicative of improved operational efficiency, better working capital management, or other strategic financial actions that enhanced cash generation capacity during that year.
Interest Paid, Net of Tax
Edwards Lifesciences Corp., interest paid, net of tax calculation
US$ in thousands
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
2 2021 Calculation
Cash paid during the year for interest, tax = Cash paid during the year for interest × EITR
= 20,200 × 11.69% = 2,361
- Effective Income Tax Rate (EITR) Trend
- The effective income tax rate exhibited notable fluctuations over the five-year period. Initially, in 2017, the rate stood at 15.19%. This figure declined sharply to 3.07% in 2018, representing a significant reduction. Subsequently, the rate increased to 10.01% in 2019 and remained relatively stable around 10.18% in 2020, followed by a moderate rise to 11.69% in 2021. Overall, the EITR demonstrated volatility with a pronounced dip in 2018 and a gradual upward trend thereafter.
- Cash Paid During the Year for Interest, Net of Tax
- The cash outflows related to interest payments, net of tax, showed variability across the years under review. Starting at $16,877 thousand in 2017, the amount increased significantly to $29,176 thousand in 2018, indicating a substantial rise in interest expenses or changes in financing activities. In the years following, the cash paid for interest decreased to $17,908 thousand in 2019 and remained relatively steady around the $17,800 thousand level in both 2020 and 2021. This pattern suggests a peak in 2018, followed by a normalization of interest cash payments.
- Summary Insights
- The data reflect a period of tax rate instability, with a marked reduction in the effective income tax rate in 2018, followed by a partial rebound in subsequent years. This could imply tax strategy adjustments, changes in tax legislation, or one-time tax effects during that year. The interest payments peaked in 2018, potentially linked to increased borrowing or refinancing activities, and then stabilized, indicating a possible repayment or restructuring of debt obligations after that peak. The interplay of these financial factors suggests focused management efforts in tax and financing policies during the period analyzed.
Enterprise Value to FCFF Ratio, Current
Edwards Lifesciences Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 66,267,039) |
| Free cash flow to the firm (FCFF) | 1,420,139) |
| Valuation Ratio | |
| EV/FCFF | 46.66 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Abbott Laboratories | 34.52 |
| Elevance Health Inc. | 12.09 |
| Intuitive Surgical Inc. | 129.04 |
| Medtronic PLC | 23.88 |
| UnitedHealth Group Inc. | 14.03 |
| EV/FCFF, Sector | |
| Health Care Equipment & Services | 19.74 |
| EV/FCFF, Industry | |
| Health Care | 19.28 |
Based on: 10-K (reporting date: 2021-12-31).
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
Edwards Lifesciences Corp., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | 66,267,037) | 53,931,479) | 47,290,710) | 36,573,998) | 27,806,373) | |
| Free cash flow to the firm (FCFF)2 | 1,420,139) | 664,874) | 918,908) | 714,276) | 842,077) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 46.66 | 81.12 | 51.46 | 51.20 | 33.02 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Abbott Laboratories | 23.47 | 36.94 | — | — | — | |
| Elevance Health Inc. | 12.74 | 6.04 | — | — | — | |
| Intuitive Surgical Inc. | 56.01 | 76.70 | — | — | — | |
| Medtronic PLC | 33.84 | 21.43 | — | — | — | |
| UnitedHealth Group Inc. | 22.21 | 15.82 | — | — | — | |
| EV/FCFF, Sector | ||||||
| Health Care Equipment & Services | 23.51 | 18.77 | — | — | — | |
| EV/FCFF, Industry | ||||||
| Health Care | 17.80 | 19.47 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
3 2021 Calculation
EV/FCFF = EV ÷ FCFF
= 66,267,037 ÷ 1,420,139 = 46.66
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited a consistent upward trend over the five-year period. Starting at approximately $27.8 billion at the end of 2017, it increased steadily each year, reaching about $66.3 billion by the end of 2021. This represents a more than twofold increase, indicating significant growth in the company's total valuation over the period.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm showed some fluctuation during the period. It started at approximately $842 million in 2017, decreased to around $714 million in 2018, then recovered to about $919 million in 2019. A decline was noted in 2020 to roughly $665 million, followed by a substantial increase in 2021 to approximately $1.42 billion. Overall, despite some volatility, the FCFF experienced a positive growth trend by the end of the five years.
- EV/FCFF Ratio
- The EV to FCFF ratio displayed considerable variation throughout the period. It began at 33.02 in 2017, increased sharply to 51.2 in 2018, and remained almost stable at 51.46 in 2019. In 2020, the ratio peaked at 81.12, indicating a significant rise in valuation relative to cash flow. However, by the end of 2021, the ratio had decreased to 46.66. This pattern suggests periods of company valuation expanding faster than free cash flow, followed by a partial correction.