Enterprise Value to FCFF (EV/FCFF)
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National Oilwell Varco Inc. pages available for free this week:
- Income Statement
- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Price to Operating Profit (P/OP) since 2005
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Free Cash Flow to The Firm (FCFF)
National Oilwell Varco Inc., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
- Operating Cash Flow
- Net cash provided by operating activities showed significant volatility during the period analyzed. Starting at 2,143 million US dollars in 2011, it experienced a sharp decline to 620 million US dollars in 2012. Subsequently, there was a substantial recovery to 3,397 million US dollars in 2013, followed by a decrease to 2,525 million in 2014 and a further decline to 1,332 million in 2015. This pattern indicates large fluctuations in cash generated from core business operations over the five-year span.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm mirrored the trend observed in operating cash flow but exhibited more pronounced variability. It began at 1,690 million US dollars in 2011, then drastically dropped to 65 million in 2012. There was a significant rebound to 2,805 million in 2013, followed by decreases to 1,898 million in 2014 and 1,013 million in 2015. The substantial decrease in 2012 and subsequent recovery in 2013 suggest potential changes in investment, capital expenditure, or working capital management affecting free cash available to the firm.
- Overall Insights
- The data indicates that both operating cash flow and free cash flow to the firm experienced considerable swings during the period. The sharp declines in 2012 might reflect operational challenges or higher capital expenditures, while the strong recovery in 2013 points to improved cash generation capability or lower investments. The declines after 2013 imply a downward pressure on cash flows, highlighting the need to understand underlying operational or market factors contributing to this trend. Monitoring and managing operational efficiency and capital investments appears critical for sustaining healthy cash flow levels.
Interest Paid, Net of Tax
National Oilwell Varco Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
EITR = 100 × Income tax expense ÷ EBT
= 100 × ÷ =
2 2015 Calculation
Cash payments during the period for interest, tax = Cash payments during the period for interest × EITR
= × =
- Effective Income Tax Rate (EITR)
- The effective income tax rate exhibited relative stability from 2011 through 2014, fluctuating within a narrow range around 29% to 32%. Specifically, it declined from 32.07% in 2011 to 29.16% in 2012, then experienced a slight increase to 30.42% in 2013 before decreasing again to 29.74% in 2014. A notable deviation occurs in 2015, where the rate dramatically shifts to a negative 30.22%, indicating an unusual tax situation such as tax benefits, credits, or adjustments impacting the tax expense significantly during that period.
- Cash Payments During the Period for Interest, Net of Tax (US$ in millions)
- There is a clear upward trend in cash payments for interest costs on a net-of-tax basis over the five-year period. In 2011, the company paid $30 million, which slightly decreased to $28 million in 2012. From 2012 onward, there is a substantial rise, with payments increasing to $77 million in 2013, a marginal reduction to $72 million in 2014, followed by a sharp increase to $134 million in 2015. This escalating trend suggests growing interest obligations, potentially reflecting increased debt levels or higher interest rates impacting the company's financing costs.
Enterprise Value to FCFF Ratio, Current
National Oilwell Varco Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Schlumberger Ltd. | |
Based on: 10-K (reporting date: 2015-12-31).
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
National Oilwell Varco Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| 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 | ||||||
| Schlumberger Ltd. | ||||||
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
3 2015 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibits a declining trend over the five-year period. Starting at $33,665 million in 2011, it decreased substantially by 2015, reaching $12,938 million. The most pronounced decline occurred between 2013 and 2015, with the value dropping from $32,562 million to $12,938 million, indicating a significant reduction in the company's market valuation or total capitalization.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow demonstrates considerable volatility throughout the period. It started at $1,690 million in 2011, plummeted sharply to $65 million in 2012, then surged to $2,805 million in 2013. Following this peak, FCFF declined again to $1,898 million in 2014, and further dropped to $1,013 million by 2015. This fluctuation suggests variability in the firm's operational cash generation capability and potential changes in capital expenditure or working capital.
- EV/FCFF Ratio
- The EV to FCFF ratio reflects significant instability, correlating with the erratic FCFF values. In 2011, the ratio was relatively moderate at 19.92, but it drastically spiked to 443.87 in 2012, corresponding to the precipitous drop in FCFF. Subsequently, it decreased markedly to 11.61 in 2013 and remained in a narrow range around 11.76 to 12.77 through 2014 and 2015. The elevated ratio in 2012 signals an unusually high valuation relative to free cash flow, whereas the stabilization in later years suggests a convergence to more typical valuation multiples.