Enterprise Value to FCFF (EV/FCFF)
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Marathon Petroleum Corp. pages available for free this week:
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Current Ratio since 2011
- Analysis of Debt
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Free Cash Flow to The Firm (FCFF)
Marathon Petroleum Corp., FCFF calculation
US$ in millions
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).
1, 2 See details »
The financial data over the five-year period reveals notable fluctuations and a general recovery trend in cash flow metrics.
- Net cash provided by operating activities
- In 2019, net cash from operations was robust at 9,441 million US dollars. This figure sharply declined in 2020 to 807 million US dollars, indicating significant operational challenges during that period. Following this dip, there was a strong recovery in 2021 with net cash rising to 8,384 million, nearly returning to pre-decline levels. This positive momentum continued into 2022, reaching a peak of 16,319 million, nearly doubling the 2019 level. In 2023, there was a slight decrease to 14,117 million, but cash flow remained substantially higher than the early years.
- Free cash flow to the firm (FCFF)
- The FCFF showed a similar trend, beginning at 5,066 million US dollars in 2019. It turned negative in 2020, posting a cash outflow of 862 million, which indicates significant free cash flow pressure possibly due to higher capital expenditures or other investments coupled with decreased operating cash. A marked recovery occurred in 2021 with FCFF rebounding to 8,107 million. This upward trajectory continued in 2022, reaching a peak of 14,807 million. In 2023, FCFF slightly declined to 13,235 million but remained robust compared to historical levels before 2020.
Overall, the data illustrates a sharp contraction in liquidity in 2020, likely reflecting external economic or industry-specific shocks, followed by a strong and sustained recovery through 2021 to 2023. Both operational cash flow and free cash flow metrics suggest improved financial health and effective capital management in the later years, despite the slight pullback observed in 2023. This pattern underscores resilience and an ability to generate substantial cash flows after a period of significant disruption.
Interest Paid, Net of Tax
Marathon Petroleum Corp., interest paid, net of tax calculation
US$ in millions
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 paid, net of amounts capitalized, tax = Interest paid, net of amounts capitalized × EITR
= × =
3 2023 Calculation
Interest capitalized, tax = Interest capitalized × EITR
= × =
The analysis of the financial data over the five-year period reveals several noteworthy trends and patterns related to the effective income tax rate (EITR), interest paid net of amounts capitalized (net of tax), and interest capitalized net of tax.
- Effective Income Tax Rate (EITR) %
- The effective income tax rate shows considerable fluctuation across the years. It started at 25% in 2019, decreased significantly to 18% in 2020, and dropped further to 9% in 2021. However, it then rebounded to 22% in 2022 and slightly decreased to 20% in 2023. This pattern suggests variability in taxable income or changes in tax planning strategies, with the lowest tax rate observed in 2021 indicating a potentially more favorable tax position that year.
- Interest Paid, Net of Amounts Capitalized, Net of Tax (US$ in millions)
- Interest paid, net of amounts capitalized and tax, increased steadily from 881 million in 2019 to a peak of 1,120 million in 2021. This was followed by a significant decrease to 827 million in 2022. In 2023, interest paid rose again to 960 million. The initial increase may reflect rising borrowings or higher interest rates, while the dip in 2022 could indicate efforts to reduce interest expenses or repayment of debt. The increase in 2023 suggests renewed borrowing or changes in interest expense components.
- Interest Capitalized, Net of Tax (US$ in millions)
- The amount of interest capitalized net of tax shows a downward trend. It started at 119 million in 2019 and gradually decreased to 48 million in 2023, with small fluctuations in the intervening years (106 in 2020, 66 in 2021, and 81 in 2022). This decline could imply lower capitalization of interest costs, possibly due to fewer long-term projects requiring capitalization or changes in accounting policies regarding interest capitalization.
Overall, the data suggests that while the effective income tax rate experienced variability with a marked low in 2021 followed by a return to higher rates, interest-related expenses exhibited some volatility. Interest paid increased substantially through 2021 before falling in 2022 and rising moderately in 2023, whereas interest capitalization showed a consistent downward trend. These patterns likely reflect dynamic financial management responses to external economic conditions, debt structure adjustments, and tax planning considerations.
Enterprise Value to FCFF Ratio, Current
Marathon Petroleum 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 | |
| Chevron Corp. | |
| ConocoPhillips | |
| Exxon Mobil Corp. | |
| Occidental Petroleum Corp. | |
| EV/FCFF, Sector | |
| Oil, Gas & Consumable Fuels | |
| EV/FCFF, Industry | |
| Energy | |
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
Marathon Petroleum Corp., historical EV/FCFF calculation, comparison to benchmarks
| 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 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
| EV/FCFF, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| EV/FCFF, Industry | ||||||
| Energy | ||||||
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 financial data reveals several notable trends over the five-year period ending December 31, 2023.
- Enterprise Value (EV)
- The enterprise value experienced fluctuations, starting at $66,555 million in 2019 and increasing to $73,795 million in 2020. This was followed by a decline to $63,196 million in 2021 before ascending again to $77,259 million in 2022 and further rising to $83,564 million in 2023. The overall trajectory indicates growth, with a peak in 2023, despite intermittent decreases.
- Free Cash Flow to the Firm (FCFF)
- The FCFF displayed significant volatility over the period. It began at a positive $5,066 million in 2019 but sharply declined to a negative $862 million in 2020, indicating a cash outflow situation during that year. This was followed by a strong recovery in 2021 to $8,107 million, with continued growth to $14,807 million in 2022, before a moderate decrease to $13,235 million in 2023. The trend highlights a substantial rebound and sustained positive cash flow after the 2020 downturn.
- EV/FCFF Ratio
- This valuation ratio is missing for 2020 due to negative FCFF, which makes the ratio not meaningful. The ratio decreased from 13.14 in 2019 to 7.8 in 2021, further declining to 5.22 in 2022, implying an improving valuation in terms of enterprise value relative to cash flow. In 2023, the ratio increased slightly to 6.31, indicating a modest reduction in value efficiency compared to the previous year. Overall, the ratio suggests an improvement from 2019 through 2022, followed by a slight reversal in 2023.
In summary, the data indicates that the company underwent a challenging period in 2020, reflected by negative cash flows and a rising EV. However, subsequent years saw a recovery with increasing cash flows and improving valuation metrics, albeit with some variability in 2023. The general trend suggests strengthening financial performance and improving market valuation efficiency after an initial downturn.