Stock Analysis on Net
Stock Analysis on Net
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General Electric Co. (NYSE:GE)

Enterprise Value to FCFF (EV/FCFF)

Intermediate level

Free Cash Flow to The Firm (FCFF)

General Electric Co., FCFF calculation

US$ in millions

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12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net earnings (loss) attributable to the Company (4,979) (22,355) (5,786) 8,831  (6,126)
Net (earnings) loss attributable to noncontrolling interests 67  (88) (270) (291) 331 
Net noncash charges 14,879  26,832  14,165  (5,600) 19,554 
(Increase) decrease in operating capital 452  273  3,285  3,159  (1,903)
Cash from operating activities 10,419  4,662  11,394  6,099  11,856 
Cash paid during the year for interest, net of tax1 1,412  3,483  1,394  3,756  1,988 
Additions to property, plant and equipment (5,813) (7,695) (7,371) (7,199) (7,309)
Dispositions of property, plant and equipment 3,718  4,519  5,746  4,424  3,020 
Additions to internal-use software (282) (361) (549) (749) (778)
Free cash flow to the firm (FCFF) 9,454  4,608  10,614  6,331  8,777 

Based on: 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26).

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Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the General Electric Co.’s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. General Electric Co.’s FCFF decreased from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.

Interest Paid, Net of Tax

General Electric Co., interest paid, net of tax calculation

US$ in millions

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12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Effective Income Tax Rate (EITR)
EITR1 63.00% 21.00% 72.40% 35.00% 79.20%
Interest Paid, Net of Tax
Cash paid during the year for interest, before tax 3,816  4,409  5,049  5,779  9,558 
Less: Cash paid during the year for interest, tax2 2,404  926  3,655  2,023  7,570 
Cash paid during the year for interest, net of tax 1,412  3,483  1,394  3,756  1,988 

Based on: 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26).

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2 2019 Calculation
Cash paid during the year for interest, tax = Cash paid during the year for interest × EITR
= 3,816 × 63.00% = 2,404

Enterprise Value to FCFF Ratio, Current

General Electric Co., current EV/FCFF calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Selected Financial Data (US$ in millions)
Enterprise value (EV) 95,730 
Free cash flow to the firm (FCFF) 9,454 
Valuation Ratio
EV/FCFF 10.13
Benchmarks
EV/FCFF, Competitors1
3M Co. 20.89
Honeywell International Inc. 23.44
EV/FCFF, Sector
General Industrials 15.77
EV/FCFF, Industry
Industrials 25.67

Based on: 10-K (filing date: 2020-02-24).

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

General Electric Co., historical EV/FCFF calculation, comparison to benchmarks

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 111,177  154,405  196,136  308,838  372,010 
Free cash flow to the firm (FCFF)2 9,454  4,608  10,614  6,331  8,777 
Valuation Ratio
EV/FCFF3 11.76 33.51 18.48 48.78 42.38
Benchmarks
EV/FCFF, Competitors4
3M Co. 19.71 24.70 28.37 21.42 19.80
Honeywell International Inc. 21.13 19.22 22.51 21.27 18.68
EV/FCFF, Sector
General Industrials 15.51 20.46 22.96 29.63 26.07
EV/FCFF, Industry
Industrials 24.83 22.98 24.59 23.62 20.18

Based on: 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26).

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3 2019 Calculation
EV/FCFF = EV ÷ FCFF
= 111,177 ÷ 9,454 = 11.76

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/FCFF Enterprise value to free cash flow to the firm is whole company valuation indicator. General Electric Co.’s EV/FCFF ratio increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.