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Enterprise Value to FCFF (EV/FCFF)
Difficulty: Intermediate
Free Cash Flow to The Firm (FCFF)
Lockheed Martin Corp., FCFF calculation
USD $ in millions
Based on: 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-09).
| Item | Description | The company |
|---|---|---|
| FCFF | Free cash flow to the firm is the cash flow available to the Lockheed Martin Corp.’s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. | Lockheed Martin Corp.’s FCFF increased from 2016 to 2017 but then declined significantly from 2017 to 2018. |
Interest Paid, Net of Tax
Lockheed Martin Corp., interest paid, net of tax calculation
USD $ in millions
Based on: 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-09).
2018 Calculations
2 Interest payments, tax = Interest payments × EITR
= × =
Enterprise Value to FCFF Ratio, Current
Lockheed Martin Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (USD $ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors | |
| Boeing Co. | |
| General Dynamics Corp. | |
| Northrop Grumman Corp. | |
| Raytheon Co. | |
| United Technologies Corp. | |
| EV/FCFF, Sector | |
| Aerospace & Defense | |
| EV/FCFF, Industry | |
| Industrials | |
Based on: 10-K (filing date: 2019-02-08).
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
Lockheed Martin Corp., historical EV/FCFF calculation, comparison to benchmarks
Based on: 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-09).
2018 Calculations
3 EV/FCFF = EV ÷ FCFF
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| EV/FCFF | Enterprise value to free cash flow to the firm is whole company valuation indicator. | Lockheed Martin Corp.’s EV/FCFF ratio declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level. |