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: 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).
- Operating Cash Flow
- The net cash provided by operating activities shows a notable decline from 24,269 million USD in 2020 to 6,853 million USD in 2022, indicating a significant reduction during this period. This is followed by a recovery trend, increasing to 14,918 million USD in 2023 and slightly rising further to 15,423 million USD in 2024. Despite the rebound, the operating cash flow in 2023 and 2024 remains below the 2020 level, suggesting partial recovery but not a full return to earlier performance.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm mirrors a similar pattern to operating cash flow, starting at 22,319 million USD in 2020 and sharply decreasing to 3,129 million USD by 2022. Subsequent years show an improvement, with FCFF advancing to 12,291 million USD in 2023 and 13,341 million USD in 2024. Despite this upward movement, FCFF in the last two reported years remains substantially below the peak seen in 2020, highlighting ongoing challenges or investments affecting free cash generation.
- Overall Trend and Interpretation
- Both operating cash flow and free cash flow exhibit a distinct downward trend from 2020 through 2022, likely reflecting operational or market difficulties during this interval. The partial recovery commencing in 2023 and continuing into 2024 implies some stabilization or improvement in cash-generating capability. However, the levels have not returned to those observed in pre-2021 periods, indicating potential structural changes, increased capital expenditures, or shifts in operational efficiency affecting cash flows. Monitoring these cash flow metrics in coming years will be crucial to assess whether recovery continues or if the company faces sustained pressure on liquidity generation.
Interest Paid, Net of Tax
Ford Motor Co., 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
Cash paid for interest, tax = Cash paid for interest × EITR
= 8,100 × 18.50% = 1,499
- Effective Income Tax Rate (EITR)
- The effective income tax rate demonstrated fluctuations over the five-year period. It remained steady at 21% in 2020 and 2021, experienced an increase to 28.6% in 2022, then reverted to 21% in 2023, followed by a decrease to 18.5% in 2024. This pattern indicates variability in tax expense relative to income, with a notable peak in 2022 before a decline.
- Cash Paid for Interest, Net of Tax
- The cash paid for interest, net of tax, showed a general upward trend from 2020 to 2024. The amount paid was $3,792 million in 2020, slightly decreasing to $3,713 million in 2021, then further declining to $3,142 million in 2022. However, beginning in 2023, there was a marked increase to $5,609 million, continuing to rise in 2024 reaching $6,602 million. This suggests increasing interest expenses in the later years, which may reflect higher debt levels or rising interest rates affecting the cost of financing.
Enterprise Value to FCFF Ratio, Current
Ford Motor Co., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 167,240) |
| Free cash flow to the firm (FCFF) | 13,341) |
| Valuation Ratio | |
| EV/FCFF | 12.54 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| General Motors Co. | 15.46 |
| Tesla Inc. | 252.81 |
| EV/FCFF, Sector | |
| Automobiles & Components | 47.21 |
| EV/FCFF, Industry | |
| Consumer Discretionary | 38.76 |
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
Ford Motor Co., 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 | 156,899) | 159,948) | 147,561) | 160,518) | 157,639) | |
| Free cash flow to the firm (FCFF)2 | 13,341) | 12,291) | 3,129) | 13,273) | 22,319) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 11.76 | 13.01 | 47.17 | 12.09 | 7.06 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| General Motors Co. | 15.38 | 9.84 | 11.80 | 16.37 | 13.12 | |
| Tesla Inc. | 344.19 | 131.52 | 69.36 | 192.76 | 278.10 | |
| EV/FCFF, Sector | ||||||
| Automobiles & Components | 59.44 | 24.92 | 34.23 | 42.88 | 30.62 | |
| EV/FCFF, Industry | ||||||
| Consumer Discretionary | 41.92 | 33.08 | 50.80 | 60.24 | 46.23 | |
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
= 156,899 ÷ 13,341 = 11.76
4 Click competitor name to see calculations.
- Enterprise Value (EV) Trends
- The enterprise value exhibited moderate fluctuations over the five-year period. Beginning at approximately $157.6 billion in 2020, it slightly increased to $160.5 billion in 2021, followed by a decline to $147.6 billion in 2022. Subsequently, it rose again to about $159.9 billion in 2023 before experiencing a mild decrease to $156.9 billion in 2024. Overall, the EV remained relatively stable, oscillating within a range close to the initial value, without significant long-term appreciation or depreciation.
- Free Cash Flow to the Firm (FCFF) Trends
- The free cash flow to the firm showed considerable volatility and an overall declining trend during the early years, starting from around $22.3 billion in 2020 and sharply dropping to approximately $3.1 billion in 2022. However, a notable recovery in FCFF followed with an increase to approximately $12.3 billion in 2023 and a slight further rise to $13.3 billion in 2024. Despite this recovery, FCFF in the latter two years remained substantially lower than the initial 2020 figure, indicating a period of financial strain or reduced cash generation capacity during 2021 and 2022.
- EV/FCFF Ratio Analysis
- The EV to FCFF ratio experienced significant variation, reflecting the interplay between enterprise value and cash flow generation. The ratio started at a moderate level of 7.06 in 2020 and escalated sharply to 12.09 in 2021. It peaked dramatically in 2022 at 47.17, indicative of a substantial decline in FCFF relative to the enterprise value. Following this peak, the ratio decreased markedly to 13.01 in 2023 and further to 11.76 in 2024, aligning with the partial recovery in free cash flow. These fluctuations suggest periods of heightened valuation relative to cash flow, possibly indicating increased risk or market uncertainty in 2022, with improvement in subsequent years.
- Overall Observations
- The data reveal a period of financial stress around 2021 and 2022, characterized by significant reduction in cash flow generation and a corresponding spike in the EV/FCFF ratio. The subsequent partial recovery in FCFF and normalization of the valuation ratio suggest an improvement in operational cash generation and possibly market perceptions from 2023 onward. Enterprise value remained relatively steady, implying that market capitalization or overall valuation was less volatile than cash flow metrics during the period analyzed.