Stock Analysis on Net

Mastercard Inc. (NYSE:MA)

Enterprise Value to FCFF (EV/FCFF) 

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Free Cash Flow to The Firm (FCFF)

Mastercard Inc., FCFF calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Net income 8,687  6,411  8,118  5,859  3,915 
Net noncash charges 1,692  1,963  1,763  1,677  1,926 
Changes in operating assets and liabilities (916) (1,150) (1,698) (1,313) (286)
Net cash provided by operating activities 9,463  7,224  8,183  6,223  5,555 
Cash paid for interest, net of tax1 336  257  165  125  97 
Purchases of property and equipment (407) (339) (422) (330) (300)
Capitalized software (407) (369) (306) (174) (123)
Free cash flow to the firm (FCFF) 8,985  6,773  7,620  5,844  5,229 

Based on: 10-K (reporting date: 2021-12-31), 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).

Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the Mastercard Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. Mastercard Inc. FCFF decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Interest Paid, Net of Tax

Mastercard Inc., interest paid, net of tax calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Effective Income Tax Rate (EITR)
EITR1 15.70% 17.40% 16.90% 18.50% 28.00%
Interest Paid, Net of Tax
Cash paid for interest, before tax 399  311  199  153  135 
Less: Cash paid for interest, tax2 63  54  34  28  38 
Cash paid for interest, net of tax 336  257  165  125  97 

Based on: 10-K (reporting date: 2021-12-31), 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).

1 See details »

2 2021 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= 399 × 15.70% = 63


Enterprise Value to FCFF Ratio, Current

Mastercard Inc., current EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Selected Financial Data (US$ in millions)
Enterprise value (EV) 345,977 
Free cash flow to the firm (FCFF) 8,985 
Valuation Ratio
EV/FCFF 38.50
Benchmarks
EV/FCFF, Competitors1
Accenture PLC 23.19
Adobe Inc. 29.70
International Business Machines Corp. 13.91
Intuit Inc. 43.01
Microsoft Corp. 34.16
Oracle Corp. 35.71
PayPal Holdings Inc. 14.29
Salesforce Inc. 34.69
ServiceNow Inc. 54.97
Visa Inc. 29.27
EV/FCFF, Sector
Software & Services 30.88
EV/FCFF, Industry
Information Technology 28.85

Based on: 10-K (reporting date: 2021-12-31).

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

Mastercard Inc., historical EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 365,060  338,628  341,613  222,600  177,425 
Free cash flow to the firm (FCFF)2 8,985  6,773  7,620  5,844  5,229 
Valuation Ratio
EV/FCFF3 40.63 50.00 44.83 38.09 33.93
Benchmarks
EV/FCFF, Competitors4
Accenture PLC 24.76 17.90 18.49 17.18 19.43
Adobe Inc. 33.61 40.43 40.48 31.36 33.45
International Business Machines Corp. 13.10 9.35 12.86 12.27 12.20
Intuit Inc. 48.64 37.90 33.30 27.69 25.66
Microsoft Corp. 38.37 33.99 26.37 23.99 15.60
Oracle Corp. 16.36 14.99 14.03 11.11 15.07
PayPal Holdings Inc. 19.26 52.80 28.53 16.81 36.26
Salesforce Inc. 44.91 39.63 41.21 40.68 33.77
ServiceNow Inc. 60.36 84.56 73.46 75.66 56.67
Visa Inc. 28.71 44.35 31.67 25.49 29.33
EV/FCFF, Sector
Software & Services 31.52 31.00 25.98 22.18 19.51
EV/FCFF, Industry
Information Technology 28.12 26.14 21.26 17.95 18.37

Based on: 10-K (reporting date: 2021-12-31), 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).

1 See details »

2 See details »

3 2021 Calculation
EV/FCFF = EV ÷ FCFF
= 365,060 ÷ 8,985 = 40.63

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/FCFF Enterprise value to free cash flow to the firm is whole company valuation indicator. Mastercard Inc. EV/FCFF ratio increased from 2019 to 2020 but then decreased significantly from 2020 to 2021.