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General Mills Inc. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
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Free Cash Flow to The Firm (FCFF)
Based on: 10-K (reporting date: 2019-05-26), 10-K (reporting date: 2018-05-27), 10-K (reporting date: 2017-05-28), 10-K (reporting date: 2016-05-29), 10-K (reporting date: 2015-05-31), 10-K (reporting date: 2014-05-25).
1, 2 See details »
The financial data reveals the following trends and insights regarding cash flow performance over the examined six-year period:
- Net Cash Provided by Operating Activities
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This metric demonstrates a generally stable pattern with some fluctuations. Starting at approximately $2.54 billion in 2014, the value remained nearly constant in 2015, followed by a slight increase to about $2.63 billion in 2016. However, in 2017, a noticeable decline occurred, bringing the figure down to roughly $2.31 billion. This dip was reversed in 2018, with a significant increase to $2.84 billion, representing the highest value recorded in the period. In 2019, the value decreased marginally to around $2.81 billion, maintaining a relatively strong cash flow from operations near the peak of the timeframe.
- Free Cash Flow to the Firm (FCFF)
-
The free cash flow to the firm follows a somewhat parallel trend to operating cash flows but exhibits slightly greater variation. Starting at about $2.08 billion in 2014, it decreased modestly in 2015 and rose slightly in 2016. A more pronounced drop is seen in 2017, falling to approximately $1.84 billion, the lowest in the period. In contrast, 2018 experienced a strong rebound with FCFF climbing to nearly $2.42 billion, followed by a further increase to around $2.70 billion in 2019, which marks the peak value here.
Overall, the data indicates that while operating cash flows remain solid with minor year-to-year volatility, free cash flow to the firm is slightly more sensitive to changes, particularly showing a dip in 2017 and a marked recovery in the subsequent years. The improvements in 2018 and 2019 suggest enhanced cash generation capacity and potential efficiency gains or capital expenditure management improving free cash flow for the company.
Interest Paid, Net of Tax
Based on: 10-K (reporting date: 2019-05-26), 10-K (reporting date: 2018-05-27), 10-K (reporting date: 2017-05-28), 10-K (reporting date: 2016-05-29), 10-K (reporting date: 2015-05-31), 10-K (reporting date: 2014-05-25).
2 2019 Calculation
Cash interest payments, tax = Cash interest payments × EITR
= × =
3 2019 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= × =
- Effective Income Tax Rate (EITR) Trend
- The effective income tax rate exhibited a consistent downward trend over the six-year period. Starting at 33.3% in May 2014 and remaining steady into 2015, the rate gradually declined each subsequent year. By May 2017, the rate had decreased to 28.8%, continuing downward to 27.2% in May 2018, and sharply dropping to 18.1% by May 2019. This significant reduction in EITR may indicate improved tax efficiency or changes in tax legislation benefiting the company.
- Cash Interest Payments, Net of Tax
- Cash interest payments, net of tax, fluctuated moderately between 2014 and 2018, remaining within the range of approximately $192 million to $203 million. However, in the latest year ending May 2019, there was a notable increase, with cash interest payments more than doubling to approximately $410 million. This sharp rise may suggest either an increase in debt levels or higher interest rates on existing or new borrowings.
- Capitalized Interest, Net of Tax
- Capitalized interest showed a more variable pattern with no clear long-term trend. The values increased from approximately $3.3 million in 2014 to a peak of about $5.3 million in 2016, followed by a decline to around $2.3 million by 2019. The initial increase could reflect investments in long-term projects capitalizing interest costs, whereas the subsequent decline might indicate reduced capital expenditures or changes in project financing strategies.
Enterprise Value to FCFF Ratio, Current
Selected Financial Data (US$ in thousands) | |
Enterprise value (EV) | |
Free cash flow to the firm (FCFF) | |
Valuation Ratio | |
EV/FCFF | |
Benchmarks | |
EV/FCFF, Competitors1 | |
Coca-Cola Co. | |
Mondelēz International Inc. | |
PepsiCo Inc. | |
Philip Morris International Inc. |
Based on: 10-K (reporting date: 2019-05-26).
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
May 26, 2019 | May 27, 2018 | May 28, 2017 | May 29, 2016 | May 31, 2015 | May 25, 2014 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Enterprise value (EV)1 | |||||||
Free cash flow to the firm (FCFF)2 | |||||||
Valuation Ratio | |||||||
EV/FCFF3 | |||||||
Benchmarks | |||||||
EV/FCFF, Competitors4 | |||||||
Coca-Cola Co. | |||||||
Mondelēz International Inc. | |||||||
PepsiCo Inc. | |||||||
Philip Morris International Inc. |
Based on: 10-K (reporting date: 2019-05-26), 10-K (reporting date: 2018-05-27), 10-K (reporting date: 2017-05-28), 10-K (reporting date: 2016-05-29), 10-K (reporting date: 2015-05-31), 10-K (reporting date: 2014-05-25).
3 2019 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value demonstrated an overall increasing trend over the six-year period. It began at approximately 40.88 billion US dollars in 2014 and rose to about 45.97 billion US dollars by 2019. Notably, there was a peak in 2016 at around 50.62 billion, followed by a decline in 2017 to roughly 40.80 billion. After this decline, EV steadily increased again through 2019.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm showed variability but generally increased over the period. Starting at approximately 2.08 billion US dollars in 2014, FCFF slightly decreased to around 1.84 billion in 2017, then experienced a significant increase reaching approximately 2.70 billion in 2019. This suggests fluctuations in operational efficiency or investment activities impacting cash generation.
- EV/FCFF Ratio
- The EV/FCFF ratio, representing the valuation multiple relative to cash flow, trended upwards from 19.66 in 2014 to a peak of 23.99 in 2016. Following this peak, the ratio declined consistently to 17.05 by 2019. This decreasing trend post-2016 implies an improving valuation attractiveness or enhanced cash flow generation relative to enterprise value.
- Summary of Trends
- The enterprise value grew overall but with fluctuations, notably a high in 2016 and a dip in 2017. Free cash flow showed variability but increased significantly toward the end of the period. The EV/FCFF ratio's rise until 2016 followed by a steady decline indicates that while the company’s market valuation fluctuated, its cash flow generation improved, potentially enhancing investor perceptions of value over time.