Enterprise Value to FCFF (EV/FCFF)
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Analysis of Profitability Ratios
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Price to FCFE (P/FCFE)
- Operating Profit Margin since 2008
- Current Ratio since 2008
- Total Asset Turnover since 2008
- Price to Earnings (P/E) since 2008
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Free Cash Flow to The Firm (FCFF)
Philip Morris International Inc., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The financial information indicates fluctuations in both net cash provided by operating activities and free cash flow to the firm over the five-year period. A general pattern of decline from 2021 to 2023 is observed, followed by a recovery in 2024 and 2025.
- Net Cash from Operations
- Net cash provided by operating activities decreased from US$11,967 million in 2021 to US$9,204 million in 2023, representing a decline of approximately 23%. This downward trend reversed in subsequent years, with values increasing to US$12,217 million in 2024 and US$12,233 million in 2025. The 2024 and 2025 figures exceed the 2021 level.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm mirrored the trend in operating cash flow. FCFF decreased from US$11,779 million in 2021 to US$8,924 million in 2023, a decrease of roughly 24%. Similar to operating cash flow, FCFF experienced a recovery, reaching US$11,947 million in 2024 and US$12,019 million in 2025. The 2024 and 2025 values are slightly above the 2021 level.
The close alignment between the trends in net cash from operations and FCFF suggests that changes in operating performance are the primary driver of fluctuations in free cash flow. The recovery observed in 2024 and 2025 indicates a potential stabilization or improvement in the underlying business operations.
- FCFF vs. Operating Cash Flow
- The difference between net cash from operating activities and FCFF remains relatively consistent across all periods, suggesting that the adjustments made to arrive at FCFF (likely related to capital expenditures) are not significantly impacting the overall trend. The difference is consistently under US$275 million annually.
Overall, the period demonstrates a temporary dip in cash generation followed by a return to, and slight exceedance of, prior levels. Continued monitoring of these trends will be important to assess the sustainability of the recent recovery.
Interest Paid, Net of Tax
Philip Morris International Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
2 2025 Calculation
Cash paid, interest, tax = Cash paid, interest × EITR
= × =
The analysis reveals a notable increase in cash paid for interest, net of tax, over the five-year period, while the effective income tax rate exhibits fluctuations. A closer examination of these trends provides insights into the company’s financial obligations and tax management.
- Cash Paid for Interest, Net of Tax
- Cash paid for interest, net of tax, demonstrates a consistent upward trajectory. Beginning at US$560 million in 2021, it increased to US$579 million in 2022, representing a modest rise. However, a significant jump is observed in 2023, reaching US$1,041 million. This growth continues in subsequent years, with figures of US$1,174 million in 2024 and US$1,355 million in 2025. This indicates a growing interest expense burden, potentially due to increased debt levels or rising interest rates.
- Effective Income Tax Rate
- The effective income tax rate shows more variability. It decreased from 21.80% in 2021 to 19.30% in 2022. A subsequent increase to 22.40% occurred in 2023, followed by a further rise to 24.70% in 2024. The rate then decreased to 19.70% in 2025. These fluctuations suggest changes in the company’s tax profile, potentially influenced by factors such as geographic earnings mix, tax planning strategies, or changes in tax legislation.
- Relationship between Interest Paid and Tax Rate
- While the effective income tax rate fluctuates, the increasing trend in net-of-tax interest paid suggests that the tax benefit derived from interest expense may not be fully offsetting the rising interest costs. The substantial increase in interest paid beginning in 2023 coincides with a rise in the effective income tax rate, potentially indicating a reduced ability to shield income from taxes through interest deductions, or a change in the tax jurisdiction mix. The decrease in the effective income tax rate in 2025 does not appear to significantly alter the upward trend in net interest paid.
In summary, the company experiences a growing net interest expense alongside a fluctuating effective income tax rate. The consistent rise in cash paid for interest, net of tax, warrants further investigation to understand the underlying drivers and potential implications for future profitability.
Enterprise Value to FCFF Ratio, Current
Philip Morris International Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Coca-Cola Co. | |
| Mondelēz International Inc. | |
| PepsiCo Inc. | |
| EV/FCFF, Sector | |
| Food, Beverage & Tobacco | |
| EV/FCFF, Industry | |
| Consumer Staples | |
Based on: 10-K (reporting date: 2025-12-31).
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
Philip Morris International Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| 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 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| EV/FCFF, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| EV/FCFF, Industry | ||||||
| Consumer Staples | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
The Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio exhibits an increasing trend over the observed period. Enterprise Value demonstrates volatility, while Free Cash Flow to the Firm (FCFF) shows relative stability with a slight increase in later years. This combination drives the observed trend in the EV/FCFF ratio.
- Enterprise Value
- Enterprise Value initially increased from US$192,527 million in 2021 to US$201,244 million in 2022. A subsequent decrease was noted in 2023, falling to US$184,812 million. However, a substantial increase occurred in 2024, reaching US$269,311 million, and continued into 2025, reaching US$330,506 million. This indicates significant fluctuations in the company’s total value, as defined by market capitalization plus debt, minus cash.
- Free Cash Flow to the Firm
- Free Cash Flow to the Firm experienced a decline from US$11,779 million in 2021 to US$10,305 million in 2022, followed by a further decrease to US$8,924 million in 2023. FCFF then began to recover, increasing to US$11,947 million in 2024 and US$12,019 million in 2025. The overall trend suggests a period of cash flow challenges followed by stabilization and modest growth.
- EV/FCFF Ratio
- The EV/FCFF ratio increased consistently throughout the period. Starting at 16.35 in 2021, it rose to 19.53 in 2022 and 20.71 in 2023. The ratio continued its upward trajectory, reaching 22.54 in 2024 and culminating at 27.50 in 2025. This indicates that the market is valuing each dollar of free cash flow generated by the firm at an increasingly higher multiple. The increasing ratio could suggest decreasing investor confidence in future cash flow generation relative to the firm’s value, or potentially reflect increased growth expectations embedded in the enterprise value.
The divergence between the fluctuating Enterprise Value and the relatively stable Free Cash Flow to the Firm is the primary driver of the increasing EV/FCFF ratio. The substantial increase in Enterprise Value in 2024 and 2025, coupled with only moderate growth in FCFF, significantly elevated the ratio.