Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Ford Motor Co., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
The financial information reveals fluctuations in both net cash provided by operating activities and free cash flow to the firm (FCFF) over the five-year period. A significant decrease in FCFF is observed between 2021 and 2022, followed by a recovery and subsequent growth through 2025.
- Net Cash from Operations
- Net cash provided by operating activities decreased substantially from US$15,787 million in 2021 to US$6,853 million in 2022. This represents a considerable contraction in cash generated from core business operations. However, operating cash flow rebounded strongly in 2023 to US$14,918 million, and continued to increase in 2024 and 2025, reaching US$21,282 million. This indicates a recovery and strengthening of the company’s operational cash generation capabilities.
- Free Cash Flow to the Firm (FCFF)
- FCFF experienced a dramatic decline from US$13,273 million in 2021 to US$3,129 million in 2022, mirroring the decrease in operating cash flow. A substantial recovery is then evident, with FCFF increasing to US$12,291 million in 2023. Further growth is observed in 2024, reaching US$13,341 million, and accelerating to US$17,987 million in 2025. This upward trend suggests improved cash flow available to all investors, including debt and equity holders.
The correlation between net cash from operations and FCFF is strong, suggesting that changes in operational cash generation are a primary driver of FCFF fluctuations. The significant recovery in both metrics from 2022 onwards indicates a positive shift in the company’s financial performance and cash-generating ability.
- Overall Trend
- The period is characterized by initial contraction followed by sustained growth. While 2022 represents a low point for both metrics, the subsequent years demonstrate a clear positive trajectory, culminating in substantial increases in both net cash from operations and FCFF by 2025.
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Interest Paid, Net of Tax
Ford Motor Co., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
2 2025 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= 8,000 × 31.00% = 2,480
The analysis reveals fluctuations in cash paid for interest, net of tax, alongside corresponding changes in the effective income tax rate over the five-year period. A notable increase in interest expense occurred between 2022 and 2023, while the effective income tax rate also exhibited variability.
- Cash Paid for Interest, Net of Tax
- Cash paid for interest, net of tax, decreased from US$3,713 million in 2021 to US$3,142 million in 2022, representing a decline of approximately 15.3%. This was followed by a substantial increase to US$5,609 million in 2023, a rise of 78.3% from the prior year. The amount continued to increase in 2024, reaching US$6,602 million, before decreasing slightly to US$5,520 million in 2025. The 2024 peak suggests a period of increased borrowing or higher interest rates, while the 2025 decrease indicates a potential stabilization or reduction in interest-bearing liabilities.
- Effective Income Tax Rate
- The effective income tax rate demonstrated considerable volatility. It rose from 21.00% in 2021 to 28.60% in 2022, a significant increase of 36.2%. The rate then returned to 21.00% in 2023, before decreasing to 18.50% in 2024. Finally, the rate increased to 31.00% in 2025. These fluctuations could be attributed to changes in tax laws, the geographic distribution of profits, or the realization of tax credits and deductions.
- Relationship between Interest Expense and Tax Rate
- The increase in cash paid for interest in 2023 coincided with a return to the initial effective income tax rate of 21.00%. The subsequent rise in interest expense in 2024 occurred alongside a decrease in the effective income tax rate to 18.50%. The final year, 2025, shows a decrease in interest expense coupled with an increase in the effective income tax rate to 31.00%. This suggests that changes in the effective income tax rate do not directly correlate with changes in net interest expense, and other factors are likely influencing both figures.
Overall, the period examined demonstrates a dynamic financial landscape with significant shifts in both interest expense and the effective income tax rate. Further investigation would be required to determine the underlying drivers of these changes and their implications for future financial performance.
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Enterprise Value to FCFF Ratio, Current
Ford Motor Co., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 171,434) |
| Free cash flow to the firm (FCFF) | 17,987) |
| Valuation Ratio | |
| EV/FCFF | 9.53 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| General Motors Co. | 9.42 |
| Tesla Inc. | 222.74 |
| EV/FCFF, Sector | |
| Automobiles & Components | 47.54 |
| EV/FCFF, Industry | |
| Consumer Discretionary | 46.60 |
Based on: 10-K (reporting date: 2025-12-31).
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
Ford Motor Co., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 180,131) | 156,899) | 159,948) | 147,561) | 160,518) | |
| Free cash flow to the firm (FCFF)2 | 17,987) | 13,341) | 12,291) | 3,129) | 13,273) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 10.01 | 11.76 | 13.01 | 47.17 | 12.09 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| General Motors Co. | 10.12 | 15.38 | 9.84 | 11.80 | 16.37 | |
| Tesla Inc. | 237.53 | 344.47 | 131.55 | 69.40 | 194.05 | |
| EV/FCFF, Sector | ||||||
| Automobiles & Components | 50.66 | 59.44 | 24.92 | 34.24 | 42.92 | |
| EV/FCFF, Industry | ||||||
| Consumer Discretionary | 107.94 | 41.98 | 33.07 | 51.09 | 60.31 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= 180,131 ÷ 17,987 = 10.01
4 Click competitor name to see calculations.
The relationship between enterprise value and free cash flow to the firm exhibits considerable fluctuation over the observed period. Initially, a significant increase in the Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio is noted, followed by a subsequent decline towards levels approaching the initial value.
- Enterprise Value
- Enterprise Value decreased from US$160,518 million in 2021 to US$147,561 million in 2022, representing a decline. A recovery was then observed in 2023, reaching US$159,948 million, followed by a slight decrease to US$156,899 million in 2024. The final year presented shows an increase to US$180,131 million in 2025.
- Free Cash Flow to the Firm
- Free Cash Flow to the Firm experienced a substantial decrease from US$13,273 million in 2021 to US$3,129 million in 2022. A strong recovery occurred in 2023, with FCFF reaching US$12,291 million. Continued growth was observed in subsequent years, reaching US$13,341 million in 2024 and US$17,987 million in 2025.
- EV/FCFF Ratio
- The EV/FCFF ratio increased markedly from 12.09 in 2021 to 47.17 in 2022, indicating a substantial increase in the valuation relative to the cash flow generated. The ratio then decreased to 13.01 in 2023 and further to 11.76 in 2024. This downward trend continued, with the ratio reaching 10.01 in 2025. The decrease in the ratio suggests that the enterprise value is becoming more aligned with the generated free cash flow, or that expectations for future cash flows are increasing relative to the current enterprise value.
The most significant change is the dramatic increase in the EV/FCFF ratio in 2022, driven by a large decrease in FCFF coupled with a moderate decrease in EV. The subsequent years demonstrate a return towards lower, more stable levels for the ratio, coinciding with the recovery and growth of FCFF.
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