Eli Lilly & Co. (LLY)

Enterprise Value to FCFF (EV/FCFF)

Difficulty: Intermediate

Eli Lilly & Co., FCFF calculation

USD $ in thousands

	12 months ended	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Net income (loss)
	Net noncash charges
	Other changes in operating assets and liabilities, net of acquisitions and divestitures
	Net cash provided by operating activities
	Cash payments for interest on borrowings, net of tax¹
	Interest costs capitalized, net of tax²
	Purchases of property and equipment
	Disposals of property and equipment
	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 Eli Lilly & Co.'s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Eli Lilly & Co.'s FCFF increased from 2015 to 2016 and from 2016 to 2017.

Eli Lilly & Co., interest paid, net of tax calculation

USD $ in thousands

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 payments for interest on borrowings, before tax
Less: Cash payments for interest on borrowings, tax²
Cash payments for interest on borrowings, net of tax
Interest Costs Capitalized, Net of Tax
Interest costs capitalized, before tax
Less: Interest costs capitalized, tax³
Interest costs capitalized, net of tax

2017 Calculations

² Cash payments for interest on borrowings, tax = Cash payments for interest on borrowings × EITR
= hidden × hidden % = hidden

³ Interest costs capitalized, tax = Interest costs capitalized × EITR
= hidden × hidden % = hidden

Eli Lilly & Co., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (USD $ in thousands)
Enterprise value (EV)
Free cash flow to the firm (FCFF)
Ratio
EV/FCFF
Benchmarks
EV/FCFF, Competitors
Abbott Laboratories
AbbVie Inc.
Allergan PLC
Amgen Inc.
Biogen Inc.
Bristol-Myers Squibb Co.
Celgene Corp.
Gilead Sciences Inc.
Johnson & Johnson
Merck & Co. Inc.
Pfizer Inc.
Regeneron Pharmaceuticals Inc.
EV/FCFF, Sector
Pharmaceuticals & Biotechnology
EV/FCFF, Industry
Health Care

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.

Eli Lilly & Co., 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 thousands)
	Enterprise value (EV)¹
	Free cash flow to the firm (FCFF)²
	Ratio
	EV/FCFF³
	Benchmarks
	EV/FCFF, Competitors
	Abbott Laboratories
	AbbVie Inc.
	Allergan PLC
	Amgen Inc.
	Biogen Inc.
	Bristol-Myers Squibb Co.
	Celgene Corp.
	Gilead Sciences Inc.
	Johnson & Johnson
	Merck & Co. Inc.
	Pfizer Inc.
	Regeneron Pharmaceuticals Inc.
	EV/FCFF, Sector
	Pharmaceuticals & Biotechnology
	EV/FCFF, Industry
	Health Care

2017 Calculations

³ EV/FCFF = EV ÷ FCFF
= hidden ÷ hidden = hidden

Ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	Eli Lilly & Co.'s EV/FCFF ratio declined from 2015 to 2016 and from 2016 to 2017.

	Eli Lilly & Co.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

	All companies
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality