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Microsoft Excel LibreOffice Calc


Enterprise Value to FCFF (EV/FCFF)

Difficulty: Intermediate


Free Cash Flow to The Firm (FCFF)

International Business Machines Corp., FCFF calculation

USD $ in millions

Microsoft Excel LibreOffice Calc
12 months ended Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Net income attributable to IBM hidden hidden hidden hidden hidden
Net income attributable to noncontrolling interest hidden hidden hidden hidden hidden
Net noncash charges hidden hidden hidden hidden hidden
Changes in operating assets and liabilities, net of acquisitions/divestitures hidden hidden hidden hidden hidden
Net cash provided by operating activities hidden hidden hidden hidden hidden
Interest paid on debt, net of tax1 hidden hidden hidden hidden hidden
Interest capitalized, net of tax2 hidden hidden hidden hidden hidden
Payments for property, plant and equipment hidden hidden hidden hidden hidden
Proceeds from disposition of property, plant and equipment hidden hidden hidden hidden hidden
Investment in software hidden hidden hidden hidden hidden
Capital lease obligations hidden hidden hidden hidden hidden
Free cash flow to the firm (FCFF) hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28), 10-K (filing date: 2016-02-23), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-25).

Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the International Business Machines Corp.'s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. International Business Machines Corp.'s FCFF increased from 2015 to 2016 but then declined significantly from 2016 to 2017.

Interest Paid, Net of Tax

International Business Machines Corp., interest paid, net of tax calculation

USD $ in millions

Microsoft Excel LibreOffice Calc
12 months ended Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Effective Income Tax Rate (EITR)
EITR1 hidden hidden hidden hidden hidden
Interest Paid, Net of Tax
Interest paid on debt, before tax hidden hidden hidden hidden hidden
Less: Interest paid on debt, tax2 hidden hidden hidden hidden hidden
Interest paid on debt, net of tax hidden hidden hidden hidden hidden
Interest Costs Capitalized, Net of Tax
Interest capitalized, before tax hidden hidden hidden hidden hidden
Less: Interest capitalized, tax3 hidden hidden hidden hidden hidden
Interest capitalized, net of tax hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28), 10-K (filing date: 2016-02-23), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-25).

2017 Calculations

2 Interest paid on debt, tax = Interest paid on debt × EITR
= hidden × hidden = hidden

3 Interest capitalized, tax = Interest capitalized × EITR
= hidden × hidden = hidden


Enterprise Value to FCFF Ratio, Current

International Business Machines Corp., current EV/FCFF calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Selected Financial Data (USD $ in millions)
Enterprise value (EV) hidden
Free cash flow to the firm (FCFF) hidden
Ratio
EV/FCFF hidden
Benchmarks
EV/FCFF, Competitors
Adobe Systems Inc. hidden
Alphabet Inc. hidden
Facebook Inc. hidden
Microsoft Corp. hidden
Oracle Corp. hidden
salesforce.com inc. hidden
EV/FCFF, Sector
Software & Computer Services hidden
EV/FCFF, Industry
Technology hidden

Based on: 10-K (filing date: 2018-02-27).

If company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.

Otherwise, if company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.


Enterprise Value to FCFF Ratio, Historical

International Business Machines Corp., historical EV/FCFF calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Enterprise value (EV)1 hidden hidden hidden hidden hidden
Free cash flow to the firm (FCFF)2 hidden hidden hidden hidden hidden
Ratio
EV/FCFF3 hidden hidden hidden hidden hidden
Benchmarks
EV/FCFF, Competitors
Adobe Systems Inc. hidden hidden hidden hidden hidden
Alphabet Inc. hidden hidden hidden hidden hidden
Facebook Inc. hidden hidden hidden hidden hidden
Microsoft Corp. hidden hidden hidden hidden hidden
Oracle Corp. hidden hidden hidden hidden hidden
salesforce.com inc. hidden hidden hidden hidden hidden
EV/FCFF, Sector
Software & Computer Services hidden hidden hidden hidden hidden
EV/FCFF, Industry
Technology hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-28), 10-K (filing date: 2016-02-23), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-25).

2017 Calculations

3 EV/FCFF = EV ÷ FCFF
= hidden ÷ hidden = hidden

Ratio Description The company
EV/FCFF Enterprise value to free cash flow to the firm is whole company valuation indicator. International Business Machines Corp.'s EV/FCFF ratio increased from 2015 to 2016 but then slightly declined from 2016 to 2017 not reaching 2015 level.