Enterprise Value to FCFF (EV/FCFF)
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- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Common Stock Valuation Ratios
- Current Ratio since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
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Free Cash Flow to The Firm (FCFF)
Lockheed Martin Corp., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 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).
- Operating Cash Flow
- The net cash provided by operating activities shows a fluctuating trend over the analyzed periods. Starting from $8,183 million in 2020, it increased to $9,221 million in 2021, indicating strong operational performance that year. However, this was followed by a decline to $7,802 million in 2022. The figure saw a slight recovery in 2023 to $7,920 million but then decreased again to $6,972 million in 2024. Overall, after peaking in 2021, operating cash flow demonstrates a downward trajectory in the subsequent years.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm exhibits a trend broadly similar to that of operating cash flow. Beginning at $6,891 million in 2020, it rose to $8,153 million in 2021, marking the highest point in the period under review. This was followed by a decline to $6,624 million in 2022. A minor recovery occurred in 2023, with FCFF reaching $6,940 million, yet the figure declined again in 2024 to $6,102 million. This pattern suggests variability in capital expenditures or changes in working capital, impacting free cash flow generation.
- General Observations
- Both operating cash flow and free cash flow peaked in 2021, followed by a downward trend through 2024. The decline in these cash flow measures after 2021 may reflect challenges in operating efficiency, increased investment, or other business factors influencing cash generation. Despite some recovery in 2023, the overall pattern indicates caution in cash flow sustainability going forward.
Interest Paid, Net of Tax
Lockheed Martin Corp., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 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).
2 2024 Calculation
Interest payments, tax = Interest payments × EITR
= × =
- Effective Income Tax Rate (EITR)
- The effective income tax rate remained relatively stable over the five-year period. It started at 16.4% in 2020 and maintained this level through 2021. A noticeable decline was observed in 2022 when the rate dropped to 14.2%, followed by a slight increase to 14.5% in 2023. By 2024, the rate marginally decreased again to 14.2%. Overall, the trend indicates a reduction in the effective income tax rate compared to the initial years, suggesting possible changes in tax strategies or regulatory impacts.
- Interest Payments, Net of Tax
- Interest payments, net of tax, exhibited an upward trend throughout the analyzed period. Starting at 474 million US dollars in 2020, there was a minor decrease to 454 million in 2021. However, from 2021 onwards, the interest payments increased notably, reaching 492 million in 2022. This upward trajectory accelerated in the following years, rising sharply to 711 million in 2023 and further to 815 million in 2024. This significant growth in interest payments may reflect increased borrowing costs, higher debt levels, or changes in financial leverage during this time frame.
Enterprise Value to FCFF Ratio, Current
Lockheed Martin 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 | |
| Boeing Co. | |
| Caterpillar Inc. | |
| Eaton Corp. plc | |
| GE Aerospace | |
| Honeywell International Inc. | |
| RTX Corp. | |
| EV/FCFF, Sector | |
| Capital Goods | |
| EV/FCFF, Industry | |
| Industrials | |
Based on: 10-K (reporting date: 2024-12-31).
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
Lockheed Martin Corp., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| 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 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| RTX Corp. | ||||||
| EV/FCFF, Sector | ||||||
| Capital Goods | ||||||
| EV/FCFF, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
The financial data exhibits several noteworthy trends over the five-year period from 2020 to 2024. The enterprise value (EV) initially increased from 100,886 million USD in 2020 to a peak of 130,388 million USD in 2022, followed by a decline to 122,260 million USD in 2023 and a moderate recovery to 125,464 million USD in 2024. This indicates some volatility in the overall valuation of the firm during the latter years.
Free cash flow to the firm (FCFF) shows a different pattern. After rising from 6,891 million USD in 2020 to a high of 8,153 million USD in 2021, FCFF decreased substantially in 2022 to 6,624 million USD. It showed a slight improvement in 2023 with 6,940 million USD but declined again in 2024 to 6,102 million USD. This overall downward trend after 2021 suggests challenges in maintaining cash-generating operational efficiency.
The EV/FCFF ratio captures the relationship between enterprise value and cash flow generation. This ratio decreased from 14.64 in 2020 to 13.92 in 2021, implying improved valuation relative to cash flow. However, it rose sharply to 19.69 in 2022, decreased slightly to 17.62 in 2023, and increased again to 20.56 in 2024. The rising ratio in recent years points to a higher valuation placed on the company relative to its free cash flow, which may reflect market optimism or potential overvaluation given the declining cash flow.
- Enterprise Value Trend
- Overall growth through 2022, followed by a decline and partial recovery by 2024.
- Free Cash Flow to the Firm (FCFF)
- Growth until 2021, declining trend afterward, indicating potential operational or capital efficiency issues.
- EV/FCFF Ratio
- Initial improvement in valuation relative to cash flow in 2021, followed by a significant increase indicating higher valuation multiples despite weaker cash flow performance.
In summary, the data reveals a company experiencing fluctuations in its valuation, accompanied by weakening free cash flow generation after an initial period of improvement. The elevated EV/FCFF multiples in recent years warrant close monitoring to assess sustainability relative to operational cash flows.