Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Home Depot Inc., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2025-02-02), 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02).
The financial data reveals insights into the cash flow performance over a six-year period.
- Net Cash Provided by Operating Activities
- The net cash provided by operating activities experienced an overall upward trend from 2020 to 2025, increasing from 13,723 million US dollars in 2020 to a peak of 21,172 million US dollars in 2024. Notably, there was a significant rise in 2021 reaching 18,839 million US dollars. However, the following two years, 2022 and 2023, showed a decline, with figures decreasing first to 16,571 million and then to 14,615 million US dollars respectively, before rebounding sharply in 2024. The final data point in 2025 shows a slight decrease to 19,810 million US dollars from 2024, but still remains considerably higher compared to the initial years.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm follows a similar pattern as net cash from operating activities, with an initial growth phase from 11,759 million US dollars in 2020 to 17,043 million in 2021. It then experienced a decline over the next two years, dropping to 14,543 million in 2022 and further to 12,248 million in 2023. Subsequently, FCFF rose significantly to 18,957 million in 2024 before slightly decreasing to 17,753 million in 2025. Despite fluctuations, the general picture shows an upward trajectory over the six-year period, with cash flow availability improving in recent years.
Overall, both net cash from operating activities and free cash flow to the firm demonstrate variability but trend positively over the examined timeframe. The dip in the middle years could indicate periods of increased operational costs or investments affecting cash generation, but the recovery in later years underscores improved cash management or operational efficiency.
Interest Paid, Net of Tax
Home Depot Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2025-02-02), 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02).
2 2025 Calculation
Cash paid for interest, net of interest capitalized, tax = Cash paid for interest, net of interest capitalized × EITR
= 2,199 × 23.70% = 521
- Effective Income Tax Rate (EITR)
- The effective income tax rate has shown relative stability over the examined periods, fluctuating slightly between 23.6% and 24.4%. It peaked at 24.4% in the period ending January 30, 2022, then showed a small decline, ending at 23.7% in the latest period. This indicates a consistent tax burden as a percentage of income, with minimal volatility.
- Cash Paid for Interest, Net of Interest Capitalized, Net of Tax
- The cash interest payments demonstrate a clear upward trend over the analyzed time frame. Starting at $850 million in February 2020, the amount increased steadily each year, reaching $1,678 million by February 2025. This represents nearly a doubling of cash interest expenses over five years, suggesting growing debt levels, rising interest rates, or both. The acceleration is particularly notable after January 29, 2023, with an increment from $1,103 million to $1,375 million and further to $1,678 million, indicating a higher interest burden in recent years.
Enterprise Value to FCFF Ratio, Current
Home Depot Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 407,311) |
| Free cash flow to the firm (FCFF) | 17,753) |
| Valuation Ratio | |
| EV/FCFF | 22.94 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Amazon.com Inc. | 59.29 |
| Lowe’s Cos. Inc. | 17.54 |
| TJX Cos. Inc. | 31.24 |
| EV/FCFF, Sector | |
| Consumer Discretionary Distribution & Retail | 43.04 |
| EV/FCFF, Industry | |
| Consumer Discretionary | 39.21 |
Based on: 10-K (reporting date: 2025-02-02).
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
Home Depot Inc., historical EV/FCFF calculation, comparison to benchmarks
| Feb 2, 2025 | Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Enterprise value (EV)1 | 400,778) | 415,936) | 332,713) | 365,367) | 344,655) | 224,695) | |
| Free cash flow to the firm (FCFF)2 | 17,753) | 18,957) | 12,248) | 14,543) | 17,043) | 11,759) | |
| Valuation Ratio | |||||||
| EV/FCFF3 | 22.58 | 21.94 | 27.17 | 25.12 | 20.22 | 19.11 | |
| Benchmarks | |||||||
| EV/FCFF, Competitors4 | |||||||
| Amazon.com Inc. | — | 60.78 | 45.92 | — | — | 78.83 | |
| Lowe’s Cos. Inc. | 18.55 | 24.69 | 19.56 | 19.56 | 14.88 | 20.95 | |
| TJX Cos. Inc. | 32.22 | 24.44 | 31.93 | 33.03 | 18.30 | 19.08 | |
| EV/FCFF, Sector | |||||||
| Consumer Discretionary Distribution & Retail | — | 44.15 | 38.32 | 111.04 | 130.00 | 51.35 | |
| EV/FCFF, Industry | |||||||
| Consumer Discretionary | — | 41.92 | 33.08 | 50.80 | 60.24 | 46.23 | |
Based on: 10-K (reporting date: 2025-02-02), 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= 400,778 ÷ 17,753 = 22.58
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- Over the periods from February 2020 to February 2025, the enterprise value exhibits a fluctuating upward trend. The value increased significantly from approximately $224.7 billion in early 2020 to a peak of about $365.4 billion by early 2022. Subsequently, it declined to roughly $332.7 billion in early 2023 before rising again to approximately $416.0 billion in early 2024. The latest figure from early 2025 shows a modest decrease to around $400.8 billion. Overall, the EV increased substantially but with notable volatility between 2022 and 2025.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm shows a generally rising trajectory from 2020 through 2025, despite some variations. Starting at about $11.8 billion in early 2020, the FCFF rose to a high of approximately $17.0 billion by early 2021. Thereafter, a decline occurred in early 2022 and 2023, reaching around $12.2 billion, before increasing again to nearly $19.0 billion in early 2024. The most recent data point in early 2025 shows a slightly lower figure at roughly $17.8 billion. This indicates an overall improvement in cash generation capacity, but with intermediate periods of contraction.
- EV/FCFF Ratio
- The valuation multiple, as indicated by the EV to FCFF ratio, reflects considerable variation across the periods. It started at 19.11 in 2020, rose steadily to reach a peak of 27.17 by early 2023, reflecting a potential increase in enterprise value relative to cash flow or a decrease in cash flow relative to enterprise value during those years. Following the peak, the ratio declined to values near 21.94 in 2024 and slightly increased to 22.58 by 2025. This pattern suggests periods of potentially increased market valuation and later some moderation in valuation multiples.
- Overall Observations
- The data reveals that the company's enterprise value and free cash flow have generally increased over the examined timeframe, despite intermittent fluctuations. The rising EV coupled with improving free cash flow points to an overall strengthening in business scale and cash-generating ability. However, the valuation multiples experienced a sharp rise followed by a decline, indicating market reassessment of company value relative to cash flow over the period. The fluctuations may reflect changing market conditions, operational performance, or investor sentiment impacting the valuation and cash flow dynamics.