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- Statement of Comprehensive Income
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
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Free Cash Flow to The Firm (FCFF)
Based on: 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), 10-K (reporting date: 2019-12-31).
The annual financial data reveals notable fluctuations in the company's cash flow metrics over the five-year period under review. Both net cash provided by operating activities and free cash flow to the firm exhibit similar patterns, indicating consistency in their operational cash flow dynamics.
- Net Cash Provided by Operating Activities
- This metric experienced an increase from 5,284 million US dollars in 2019 to 5,639 million in 2020, suggesting an improvement in operational efficiency or better cash collections during this period. However, a significant decline occurred in 2021, dropping sharply to 2,262 million, which may indicate operational challenges or changes in working capital management. Following this decline, there was a rebound in 2022, rising to 4,587 million, though it did not reach previous peak levels. In 2023, the figure decreased again to 3,981 million, implying some level of volatility or external pressures affecting operating cash flow.
- Free Cash Flow to the Firm (FCFF)
- FCFF mirrors the trend observed in operating cash flows, increasing modestly from 4,713 million in 2019 to 4,861 million in 2020. A pronounced drop was seen in 2021 to 1,191 million, consistent with operating cash flow challenges in that year. A recovery ensued in 2022, with FCFF climbing to 3,745 million, followed by a slight decrease to 3,482 million in 2023. This pattern indicates that while the firm managed to restore considerable free cash flow in 2022, sustaining those levels remains a challenge.
Overall, the data depicts a period of stability followed by a sharp downturn in cash generation during 2021, with a partial recovery in subsequent years. The correlation between operating cash flows and free cash flow suggests that capital expenditures or other financing outflows have not substantially disrupted the cash conversion cycle. The oscillations highlight the need for continued focus on operational efficiencies and working capital management to stabilize and enhance cash flow performance going forward.
Interest Paid, Net of Tax
Based on: 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), 10-K (reporting date: 2019-12-31).
2 2023 Calculation
Interest payments, tax = Interest payments × EITR
= × =
The effective income tax rate (EITR) for the company exhibited notable fluctuations over the five-year period. Starting at 21.99% at the end of 2019, the rate increased significantly to 27.96% in 2020, indicating a higher tax burden that year. This was followed by a sharp decline to 14.19% in 2021, representing a substantial reduction in the effective tax rate. However, from 2021 onwards, the rate rose again, reaching 21.38% in 2022 and further increasing to 25.18% by the end of 2023. Overall, the EITR shows a cyclical pattern with peaks in 2020 and 2023, and a notable trough in 2021.
The net interest payments, measured in millions of US dollars and presented net of tax effects, demonstrated a consistent upward trend across the five-year timeframe. Beginning at $165 million in 2019, this figure increased steadily each year, reaching $186 million in 2020, $245 million in 2021, $278 million in 2022, and finally $295 million in 2023. This consistent growth suggests an increasing cost burden related to interest expenses, which may reflect higher debt levels or rising interest rates over the period.
In summary, the company experienced a volatile effective tax rate with periods of both increase and decrease, while interest payments net of tax rose steadily each year. The rising net interest payments could impact profitability and cash flow, especially in conjunction with the varying tax rates. Monitoring these trends would be critical for assessing the company's financial health and tax planning strategies going forward.
Enterprise Value to FCFF Ratio, Current
Selected Financial Data (US$ in millions) | |
Enterprise value (EV) | |
Free cash flow to the firm (FCFF) | |
Valuation Ratio | |
EV/FCFF | |
Benchmarks | |
EV/FCFF, Competitors1 | |
Abbott Laboratories | |
Elevance Health Inc. | |
Intuitive Surgical Inc. | |
Medtronic PLC | |
UnitedHealth Group Inc. | |
EV/FCFF, Sector | |
Health Care Equipment & Services | |
EV/FCFF, Industry | |
Health Care |
Based on: 10-K (reporting date: 2023-12-31).
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
Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Enterprise value (EV)1 | ||||||
Free cash flow to the firm (FCFF)2 | ||||||
Valuation Ratio | ||||||
EV/FCFF3 | ||||||
Benchmarks | ||||||
EV/FCFF, Competitors4 | ||||||
Abbott Laboratories | ||||||
Elevance Health Inc. | ||||||
Intuitive Surgical Inc. | ||||||
Medtronic PLC | ||||||
UnitedHealth Group Inc. | ||||||
EV/FCFF, Sector | ||||||
Health Care Equipment & Services | ||||||
EV/FCFF, Industry | ||||||
Health Care |
Based on: 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), 10-K (reporting date: 2019-12-31).
3 2023 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
The analysis of the annual financial data reveals notable fluctuations in several key financial metrics over the five-year period.
- Enterprise Value (EV)
- The enterprise value shows a general increasing trend from 2019 to 2022, rising from US$39,875 million in 2019 to a peak of US$55,740 million in 2022. However, there is a significant decline in 2023, with the EV dropping sharply to US$34,660 million. This indicates a considerable reduction in the market's valuation or net debt adjustments in the most recent year after a steady rise over the previous years.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm exhibits variability over the period under review. Starting at US$4,713 million in 2019, it remains relatively stable through 2020 with a slight increase to US$4,861 million. The year 2021 marks a sharp decline to US$1,191 million, representing a severe contraction in cash-generating capability. It recovers in 2022 to US$3,745 million and slightly decreases in 2023 to US$3,482 million. Overall, the FCFF shows volatility, highlighting a period of cash flow compression followed by partial recovery.
- EV/FCFF Ratio
- The EV to FCFF ratio demonstrates significant fluctuations, reflecting the changes in both enterprise value and cash flow generation. The ratio was relatively stable and moderate at 8.46 and 7.92 in 2019 and 2020 respectively, suggesting a consistent valuation relative to cash flow. In 2021, the ratio surges dramatically to 42.03, indicating that enterprise value was disproportionately high compared to the reduced FCFF, potentially signaling overvaluation or temporary operational challenges. This ratio then decreases to 14.88 in 2022 and further to 9.95 in 2023, aligning more closely with historical levels and suggesting a correction or normalization in the relationship between valuation and cash flow.
In summary, the data portray a company experiencing volatility in its cash generation capacity during 2021, with partial recovery in the subsequent years. The enterprise value peaked in 2022 before contracting significantly in 2023, which, combined with improving cash flows, results in a normalization of the EV/FCFF ratio after an extreme spike in 2021. These trends might indicate a response to external market conditions or company-specific events impacting valuation and operational performance during the observed period.