Enterprise Value to FCFF (EV/FCFF)
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- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Enterprise Value to EBITDA (EV/EBITDA)
- Operating Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Debt
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Free Cash Flow to The Firm (FCFF)
Kimberly-Clark Corp., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
- Cash Provided by Operations
- The cash generated from operational activities showed a slight decline from 2016 to 2019, decreasing from 3,232 million USD in 2016 to 2,736 million USD in 2019. However, a significant rebound occurred in 2020, with the cash provided by operations rising sharply to 3,729 million USD, surpassing the 2016 level.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow exhibited a downward trend from 2016 through 2019, moving from 2,703 million USD in 2016 to 1,969 million USD in 2019. This decline was more pronounced than the decrease in cash from operations during the same period. In 2020, the FCFF experienced a recovery, increasing to 2,731 million USD, nearly returning to the 2016 level.
- Overall Analysis
- Both cash provided by operations and free cash flow to the firm displayed a weakening trend over the four years ending in 2019, indicative of potential operational or capital expenditure challenges. The notable recovery in 2020 suggests improvements in operational efficiency or reductions in capital expenditures, contributing to enhanced liquidity and financial flexibility in the latest year measured.
Interest Paid, Net of Tax
Kimberly-Clark Corp., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
2 2020 Calculation
Interest paid, tax = Interest paid × EITR
= × =
The financial data reveals several noteworthy patterns over the five-year period ending in 2020 related to the effective income tax rate and interest expenses net of tax.
- Effective Income Tax Rate (EITR) Trends
-
The effective income tax rate experienced a general decline from 30.6% in 2016 to a low point of 19.6% in 2018. Following this decrease, there was a slight upward adjustment to 21.7% in 2019 and further to 23.1% in 2020. This trend indicates a significant reduction in tax burden between 2016 and 2018, followed by a moderate rise over the next two years, though the rate in 2020 remained materially lower than in 2016.
- Interest Paid, Net of Tax Trends
-
Interest paid, net of tax, showed a decreasing trend over the period. It started at $219 million in 2016, peaked slightly to $253 million in 2017, then declined each subsequent year to $212 million in 2018, $200 million in 2019, and ultimately $188 million in 2020. This steady reduction after the 2017 peak suggests successful efforts in managing interest expenses, possibly through refinancing, debt reduction, or lower interest rates.
- Overall Observations
-
The combination of a declining effective income tax rate and a reduction in interest payments could positively impact net income and cash flow generation capacity. However, the moderate increase in the effective tax rate after 2018 might reflect changes in tax policy or variations in taxable income composition. Meanwhile, the consistent decrease in interest paid indicates improved funding cost management.
Enterprise Value to FCFF Ratio, Current
Kimberly-Clark Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Procter & Gamble Co. | |
| EV/FCFF, Industry | |
| Consumer Staples | |
Based on: 10-K (reporting date: 2020-12-31).
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
Kimberly-Clark Corp., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| 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 | ||||||
| Procter & Gamble Co. | ||||||
| EV/FCFF, Industry | ||||||
| Consumer Staples | ||||||
Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).
3 2020 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value demonstrated a downward trend from 2016 through 2018, decreasing from approximately 50.7 billion USD to 46.2 billion USD. In 2019, there was a notable increase to around 57.0 billion USD, followed by a decline in 2020 to about 53.0 billion USD. This indicates a period of fluctuation in the overall valuation of the company after an initial decline.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm consistently decreased from 2.7 billion USD in 2016 to approximately 2.0 billion USD in 2019, reflecting a reduction in available cash generated by operations after necessary investments. However, there was a rebound in 2020, with free cash flow increasing back to roughly 2.7 billion USD, suggesting improved operational liquidity or efficiency during that year.
- EV/FCFF Ratio
- The valuation multiple, measured as enterprise value to free cash flow to the firm, was relatively stable during the period from 2016 to 2018, hovering around 18.75 to 19.61. A sharp increase occurred in 2019, with the ratio peaking at nearly 29.0, indicating that the enterprise value increased disproportionately relative to free cash flow, potentially signaling heightened investor expectations or market valuation pressures. In 2020, this ratio declined back to about 19.4, aligning more closely with earlier levels and reflecting a rebalancing between valuation and cash flow generation.
- Summary
- Overall, the data reveals fluctuating enterprise value alongside a decline and subsequent recovery in free cash flow. The marked spike in the EV/FCFF ratio in 2019 suggests a temporary divergence between market valuation and cash flow performance. By 2020, both enterprise value and free cash flow returned to levels similar to the earlier years, indicating a stabilization in financial metrics and valuation multiples.