Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Mosaic Co., FCFF calculation
US$ in thousands
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, 2 See details »
Between 2017 and 2021, a general upward trajectory in cash generation is observed, although the conversion of operating cash into free cash flow to the firm (FCFF) exhibited significant volatility. While operating cash flows grew steadily over the five-year period, FCFF experienced a severe contraction in 2019 before recovering strongly to reach its peak in 2021.
- Operating Cash Flow Performance
- Net cash provided by operating activities increased from 935,500 thousand US$ in 2017 to 2,187,000 thousand US$ in 2021. This represents a substantial growth in the core ability to generate cash, with a temporary decline occurring in 2019 before a sharp acceleration through 2020 and 2021.
- FCFF Volatility and Trends
- Free cash flow to the firm demonstrated high variance. After rising from 231,685 thousand US$ in 2017 to 623,860 thousand US$ in 2018, FCFF plummeted to 13,097 thousand US$ in 2019. A robust recovery followed, with figures rising to 595,912 thousand US$ in 2020 and peaking at 1,059,220 thousand US$ in 2021.
- Cash Flow Conversion Analysis
- A critical divergence is noted in 2019, where despite operating cash flows remaining strong at 1,095,400 thousand US$, the FCFF dropped to nearly zero. This suggests a significant increase in capital expenditures or other firm-level investments during that specific period. By 2021, the efficiency of converting operating cash to FCFF improved significantly, with FCFF representing approximately 48% of operating cash flow.
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Interest Paid, Net of Tax
Mosaic Co., interest paid, net of tax calculation
US$ in thousands
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).
2 2021 Calculation
Cash paid during the period for interest, less amount capitalized, tax = Cash paid during the period for interest, less amount capitalized × EITR
= 189,900 × 26.90% = 51,083
3 2021 Calculation
Capitalized interest on major construction projects, tax = Capitalized interest on major construction projects × EITR
= 30,100 × 26.90% = 8,097
An examination of interest-related expenditures between 2017 and 2021 reveals a period of expansion in interest obligations followed by a moderate contraction. The overall trend reflects fluctuations in both the volume of debt servicing and the tax environments affecting net payments.
- Cash Interest Expenditures
- Cash paid for interest, net of tax, exhibited a strong upward trajectory from December 31, 2017, to December 31, 2019, rising from $100.75 million to a peak of $166.50 million. This growth was followed by a period of reduction, with the figure decreasing to $138.82 million by December 31, 2021.
- Capitalized Interest Trends
- Net capitalized interest on major construction projects showed a consistent increase from 2017 through 2020, peaking at $26.31 million. This suggests a sustained period of capital investment in long-term assets, though a decline to $22.00 million in 2021 indicates a potential slowdown or completion of certain projects.
- Effective Income Tax Rate Volatility
- The effective income tax rate underwent significant variance, dropping sharply from 35.00% in 2017 to 14.00% in 2018. From 2018 onwards, the rate trended steadily upward, reaching 26.90% by the end of 2021, which directly influences the net-of-tax valuation of interest payments.
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Enterprise Value to FCFF Ratio, Current
Mosaic Co., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 22,430,053) |
| Free cash flow to the firm (FCFF) | 1,059,220) |
| Valuation Ratio | |
| EV/FCFF | 21.18 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Linde plc | 46.46 |
| Sherwin-Williams Co. | 30.94 |
| EV/FCFF, Sector | |
| Chemicals | 38.00 |
| EV/FCFF, Industry | |
| Materials | 28.99 |
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
Mosaic Co., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | 21,047,779) | 16,076,972) | 12,013,679) | 15,543,777) | 14,060,312) | |
| Free cash flow to the firm (FCFF)2 | 1,059,220) | 595,912) | 13,097) | 623,860) | 231,685) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 19.87 | 26.98 | 917.26 | 24.92 | 60.69 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Linde plc | 23.60 | — | — | — | — | |
| Sherwin-Williams Co. | 36.70 | — | — | — | — | |
| EV/FCFF, Sector | ||||||
| Chemicals | 26.76 | — | — | — | — | |
| EV/FCFF, Industry | ||||||
| Materials | 20.85 | — | — | — | — | |
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).
3 2021 Calculation
EV/FCFF = EV ÷ FCFF
= 21,047,779 ÷ 1,059,220 = 19.87
4 Click competitor name to see calculations.
The financial trajectory between 2017 and 2021 is characterized by significant volatility in cash flow generation and a corresponding fluctuation in the enterprise value to free cash flow to the firm (EV/FCFF) ratio. While the enterprise value generally trended upward, the ratio experienced an extreme peak in 2019 before stabilizing at its lowest level by the end of the period.
- Enterprise Value (EV) Trends
- The enterprise value exhibited a general growth pattern, rising from 14.06 billion USD in 2017 to 21.05 billion USD in 2021. A temporary contraction occurred in 2019, where the value dipped to 12.01 billion USD, followed by a robust recovery and accelerated growth over the subsequent two years.
- Free Cash Flow to the Firm (FCFF) Performance
- Cash flow generation showed extreme variance throughout the analyzed period. FCFF grew from 231.7 million USD in 2017 to 623.9 million USD in 2018, before plummeting to a marginal 13.1 million USD in 2019. A strong recovery followed, with FCFF reaching a period high of 1.06 billion USD in 2021, indicating a substantial increase in the firm's ability to generate cash available to all capital providers.
- EV/FCFF Ratio Interpretation
- The EV/FCFF ratio serves as a primary indicator of valuation relative to cash generation. The ratio decreased from 60.69 in 2017 to 24.92 in 2018, reflecting improved efficiency. In 2019, the ratio spiked to an anomalous 917.26, a direct result of the sharp decline in FCFF. However, this was corrected by 2020 and 2021, with the ratio falling to 26.98 and 19.87 respectively. The 2021 figure represents the most favorable valuation efficiency in the five-year sequence, as the growth in cash flow outpaced the increase in enterprise value.
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